It’s not a big secret that the wholesale industry is facing major changes. The growing demand for data services and higher bandwidths, coupled with an increased need for agility, means the industry needs to develop more intelligent ways of transferring capacity.
For PCCW Global, the international operating division of Hong Kong telco HKT, its latest acquisition will give it an opportunity to increase the depth of its capability around software development and agile development.
That, according to PCCW Global CEO Marc Halbfinger, was part of the thinking behind its acquisition in November of Console Connect, which Halbfinger officially unveiled days later at the MEF17 event in Florida.
The transaction involved two parts, with PCCW Global and HKT acquiring Console Connect’s platform, its assets, its intellectual property, as well as its technology team, led by CTO Paul Gampe.
The rest of Console Connect, including its network assets and customer contracts, were bought by Stephen Wilcox, the former founder and owner of IX Reach, which was acquired by Console Connect in 2015.
After making the official announcement, Halbfinger sat down with Capacity to explain PCCW Global’s plans for its part of Console Connect.
“The brand we feel is valuable. We acquired most the people and they have associated themselves with the brand. The development skillsets we acquired are quite deep, so we’re quite pleased,” he explains.
“Every network-based service provider needs to now increase the depth of its capability around software development, agile development to ensure services can be delivered to end users at the retail level and wholesale level as efficiently as possible.”
So what was Console Connect? The “Cloud Connection Company” was an enterprise software and interconnection company founded in 2011 by Al Burgio. The company’s sophisticated, highly-automated connectivity platform provided enterprises direct access to an ecosystem of business-critical cloud infrastructure providers and other enterprises with the click of a button.
One key asset that is now owned by PCCW Global and HKT is the Console Connect platform, which “provides a platform of value from network to cloud”, according to Halbfinger. For PCCW Global, that could possibly be expanded further, Halbfinger explains.
“We believe that can be expanded to go from network to network, and perhaps cloud to network, depending on the retail distribution channels.”
Connect people
Another key consideration behind the deal was the technology team at Console Connect, who joined PCCW Global as part of the transaction.
The team, still led by Gampe, was instrumental in developing the Console Connect platform, and it was their experience and perspective on “development and carrier ‘softwarisation’” that will “help lead PCCW Global to the next of evolution in the network”, explains Halbfinger.
“Until now in this industry we’ve had network engineers and software developers doing applications,” he adds. “Now what we’re seeing at the core infrastructure is the requirement for there to be software network engineers – people who understand both the IT development side as well as the physical layer. This Console Connect social media is going to be quite valuable for this community – it already is. All of this, we’ve acquired.”
Halbfinger goes on to explain that Gampe’s team is well versed in network orchestration and the software elements that are becoming increasingly important for modern wholesale and domestic networks.
“This is quite relevant as we announce it here at MEF, and MEF is about assuring standards-based orchestration of services from the software layer and the physical layer and for retail distribution services as well as inter-carrier framework, which has always been something that PCCW Global has excelled at the wholesale carrier interconnect,” he says.
“The acquisition positions our depth in agile development for the delivery of services for today and for the next generation. They [Gampe’s team] understand the network and understand the software development elements that are now becoming critical for any next-generation service provider that wants to be delivering services network to cloud in an on-demand basis. They excel in that space and that’s the reason we made this acquisition.”
Console split
The deal, which was brokered by the Bank Street Group, was marketed as a joint acquisition between PCCW Global and its parent company HKT. I ask Halbfinger about HKT’s involvement in the acquisition.
“Console provides capabilities which are relevant to both the domestic network and to the international network, but the effort will be managed by PCCW Global,” he says. “HKT was involved because there was also an interest to see how the development team would be able to provide application of value to also the domestic infrastructure.”
As mentioned, the deal will also see Console Connect split up, with PCCW Global choosing not to acquire the whole business. Instead, its network assets are set to become part of a separate business that will be operated as an independent global network platform under the name IX Reach.
So why did PCCW Global opt not to buy the whole thing? Halbfinger says the reason is simple – PCCW Global “does not need the physical network” because it has its own advanced global network, with infrastructure across the Americas, Europe, Africa, the Middle East, and Asia, according to its website.
Halbfinger elaborates: “We already had a physical network that was arguably more robust than the one we would have acquired. We felt it was unnecessary to acquire a network we felt we already had.”
That meant the customers also moving to the new IX Reach. “Because we didn’t want to take the network, we didn’t take the customers. They are leveraging the software platform but are sitting on the physical network, so we understood there would be a process. We’ll certainly try to find ways to collaborate.”
I ask Halbfinger to sum up why this deal is important to PCCW Global. He replies: “We’ve been providing services to enterprise for many years. Our mission statement is to provide global connectivity capability of voice, data, video and applications to service providers, multinational enterprises and to cloud. Here we are getting a network to cloud capability that has currently been mostly delivered to enterprises but it certainly also has wholesale capability.”
