The virtual ink was officially dry Wednesday on CenturyLink's $34 billion deal to buy Level 3 Communications, but the heavy lifting on integration has been underway for some time, according to CenturyLink EVP and CTO Aamir Hussain.
In part one of this Q&A with Telco Transformation, Hussain spoke about the planning that took place ahead of the deal being completed, and how both companies have tapped into SDN and NFV to virtualize their networks. In part two, Hussain will discuss the cultural implications of merging the two large companies as well as some of the synergies.
Telco Transformation: Can you start by telling us about the integration process over the past year or so of CenturyLink and Level 3?
Aamir Hussain: You know, this has been a long process. As you can imagine, a deal like this takes a couple of years to work through all of the details. So once the deal was ratified [in late October of last year] then we started getting into more details. Before that, myself and a couple of other executives here met with our counterparts. We laid out a high-level plan. The good thing is that both companies are networking companies, both are enterprise savvy, both have similar customer bases and similar products. Our footprint was very, very complimentary to theirs.
Then it [integration] had three key features. One, from a network perspective, where we have end circuits and network, and we try to integrate those, can we take some costs out of the business? From an IT and operations perspective, we were looking through our systems and operations stack, the whole operation support system and business support systems, and trying to identify where the common elements were. All those discussions were happening all year.
Now, what we couldn't do is look through our customer data, look through the number of transactions and look through contracts and other things, because we couldn't do that before the Department of Justice approval. We had put together a clean room. We brought in an outside party, and the whole company dedicated some employees who were going to help the outside party determine what's in the clean room and provide both companies with relevant information without sharing too much. That process had been in place. We have gone through a process to determine the synergy, determine our plan, determine how we should organize around customer experience, and what were some of the things we have to deliver.
At the same time, as you can appreciate, when the companies merge, a few things have to be up and running on Day One such as your HR systems, your payroll systems, your websites, and emails. A lot of work has been happening on that, and all that went live Day One, which was yesterday (Wednesday). Then we've put together "Day One Plus X" for our system where we want to make sure that we have a single VRP [view reference point] system. We went through a prioritization process and started working on that through a third party also a few months ago.
Then, on top of that; self-harmonization, product harmonization, how things are going to look like, how we will go pitch things to customers, how can they order the stuff, how it will be activated and provisioned -- all that stuff is being worked on right now. It's a lot of work that needs to get done, but we've got a decent plan in place.
TT: How are CenturyLink's and Level 3's SDN and NFV virtualized platforms alike or different?
AH: We were both trying to solve our customer experience problems. Our customers are more into the digital world. They want things up and running quickly. So SDN and NFV represent the answer for both companies; that was a good thing. For CenturyLink, 50% of our mega PoPs have SDN in them, and we have started building virtualized services that we've been sending to our customers. We are well down the SDN/NFV path. We've got a good team, we've got dedicated resources and we've got a program plan.
Level 3 was also moving in the right direction. They didn't have a SD-WAN product, so after we consummated the merger but before the deal was closed, we were trying to sell our SD-WAN as a wholesale service to Level 3. That's what they have onboarded, and that's what they are selling to their customers. That signals we are one company; we have our SD-WAN already in Level 3. They also have a very, very good orchestration platform that they have built over time. It's not fully ready, but it is almost 90% there.
They have built some functions that we were lacking. We have built some functions that they were going to build, so combining them has been very, very complementary. Now we have a single plan and a single organization that is going to virtualize our network in the next couple of years.
TT: Do you use the same SDN controllers and leverage the same open source groups? Are you pretty much aligned on those elements?
AH: Both of us started with vendor-specific stuff. For example, our controller was from Nuage. We were using Red Hat for most of the back-end stuff. Now we have an OpenStack solution, a completely open source controller. We are going to support OpenStack. We are going to support Kubernetes. I really believe that in this network, as we move toward virtualization, we'll move from hardware to software. But we have to partner with lots of vendors because we have to be able to support everything, because the scale we have guarantees we will have every vendor in our network. Most of the vendors and partners -- such as Cisco and Nokia and others -- are also moving in this direction. They're taking their software and they're virtualizing it.
We have a concept of a three-layer SDN network. The top layer is all about orchestration with a topology engine and a telemetry engine. Underneath that we'll have our SDN infrastructure that will talk to a whole bunch of domain controllers. So let's say we have a Cisco domain and their domain controller controls all of the Cisco virtual functions. They have something called NSO [network services orchestrator] that does all of that and Level 3 uses part of it. We want to make sure that we are able to control that through our SDN infrastructure. It's the same if we have Cisco, VMware, and so on.
I want to make sure that we are able to use this three-layer architecture to be able to support what's in the network, because we have $25 billion of revenue running through it. We need to be able to support that and move these customers seamlessly to a virtual platform. We have to support both back-end network functions and virtual network functions. That requires having federated orchestration, and eventually the whole view of the SDN controller as it exists today kind of goes away over time.
— Mike Robuck, Editor, Telco Transformation