THE BIG INTERVIEW
Carl Grivner, CEO, Colt Technology Services explains to James Pearce the importance of higher bandwidth and SDN in Colt’s future strategy
Carl Grivner, Colt, says SDN and high bandwidth are important
Colt Technology Services has gone through a bit of a shift over the last 12 months. Around 40% of its senior management team has been appointed either in new roles, or joined the company. This, according to CEO Carl Grivner, who himself only took the reins in January, has led the company to reassess its strategy.
“In terms of strategy, this year has gone reasonably well,” former Pacnet CEO Grivner explained. “We’ve seen some major changes to our senior team – about 40% of the team is new – and there is a big focus on culture right now.
“When you look at what we’ve got to do, we need to hire about 300 sales people, and create a customer-first improvement in customer service that will be groundbreaking. I’m confident we can do that, but the tough thing to change in most businesses is the culture. We’ve still got a lot of work to do in that area. The question is how we move faster and become more proactive and reactive to our customer’s demands and needs.”
Grivner said Colt needs to adapt to the ever-growing demands for greater bandwidth by launching what he labels as a “major network upgrade” aimed at turning Colt from a low bandwidth supplier into a higher capacity network.
Higher bandwidth market
The €150m investment will see it move from operating in the 100mb and below space, which Grivner calls a “commodity market”, into the higher bandwidth market, offering 1GB, 10GB or even 100GB of capacity.
“If you look at our customers and how they are changing, they require higher bandwidth services and are moving to more cloud services,” Grivner adds. “As they make that movement – and it will take years to get there – they begin to put more services and software in the cloud, and this is going to demand much higher bandwidth requirements than they have at the moment.
“In the past, Colt has been a low bandwidth supplier (100mb and below) but we have a lot of assets built for high bandwidth capability. We have a lot of fibre in the network capable of terabytes of capacity.”
He says the London-based carrier will announce its vendor partners over the next few months, with most of the initial network improvements coming across the metro as well as the long distance networks.
The investment will see the metro network seamlessly upgraded so that customers can travel from Paris to London on a 100G circuit seamlessly without any hops along the way. This, in terms of capability, will reduce latency, giving higher capacity and the ability to be installed “almost instantaneously”.
Colt will also add more layers of software defined networks (SDN), an area that Grivner is no stranger to. The Colt CEO has long been an advocate of SDN, admitting that he “loves” to talk about it.
Grivner first began championing SDN in 2013 during his time as CEO of Pacnet. Taking charge of the company in 2012, he set about revolutionising Asia’s largest privately-owned subsea cable network, culminating in the launch of a landmark
SDN platform in February 2014. The Pacnet Enabled Network (PEN) was one of the earliest and largest examples of how SDN can radically change the way carriers can provision and manage network services.
SDN is the disruptor
Later that year, Pacnet was sold to Telstra for almost $700m and Grivner went on to join Colt in May 2015, before becoming CEO in January.
“SDN is a disruptor for the market, it allows flexible bandwidth on demand. But a few years ago no-one really knew the term SDN, and now it has its own conferences and is a buzzword across the entire industry.
“I’m a big believer in it because I’ve seen what it did for Pacnet (now Telstra) and I’ve seen what it is doing for us here at Colt. It will revolutionise the telecoms model for many years to come. What I mean by that is, as more customers move towards cloud applications, the network needs to move in that direction too.
“We need to cloudify the network, to make it part of a cloud solution. We need to make it so that customers can buy a cloud application by the drink, and they can buy the network by the drink. That’s a totally different business model than we’ve experienced in the past.”
But he admits that the industry as a whole is still some way away from fully embracing the new technology, even if he believes European operators have now caught up with their rivals across the Atlantic and in Australia.
“When you look at some of our customers and competitors, Europe has caught up with the US quite substantially in terms of SDN. There has been significant advancement in that area over the last 12 months within Europe.
“We’re working with a number of partners on SDN, including a large US carrier we can’t name. We’ve done some trials with them. There are also a few European carriers. We also have commercial customers who we’ve been building applications for. Customers have very specific ideas around applications.”
It is Colt’s ability to respond to this, Grivner claims, that has led to the London-based firm being nominated for two awards at the upcoming Global Carrier Awards, which will be held in Paris at Capacity Europe on 8th November.
“The fact that we’re been nominated for an award for the Novitas platform is good. With SDN, right now companies are positioning themselves to prepare for the long term. Is it something every company uses right now? No. But in 24 months, I think that’ll be the case.
“The coming year should be a growth one for us as we are building up the foundation and the capabilities of a higher bandwidth network and getting the other pieces correct. But it is still two years away, and then SDN will be seen as the greatest thing since sliced bread. Right now, customers are still playing with it. They’re still working out how to use it in their own business. Beyond the technical issues, there are also administrative questions about who buys the extra capacity now that it’s so much easier to do it.”
No data centre dilemma
Another aspect of Colt’s business is its data centre arm, which Grivner said remains a very important aspect for the company, even if it has been separated in terms of management. It owns 34 data centres across Europe, managing a further seven in Asia-pacific. In January, Colt split the data centre arm from its core business, so that it can run independently within the Group, with results being reported to parent company Fidelity separately.
“We’ve separated our data centre business internally, and it is being ran by a separate team within the company. We’re just focused on the network piece, and report in to Fidelity as a separate reporting line. We agree the focus needs to be on the network.
“The data centre business is doing well, and we work together, but it acts as a separate business as far as we’re concerned. Both arms are doing well to attract new customers and new opportunities. Fidelity won’t be looking at selling it off.”
This has freed up Grivner and his team to focus on ambitions to improve and grow its network.
Not only will this involve the switch of focus to higher bandwidth capabilities, it will also see Colt launching new metro networks – at least two a year according to the CEO.
Colt already owns networks in 49 locations, and Grivner said he expects to add two new networks in the Asia region, although final locations have yet to be confirmed.
It will then look at second cities across other European locations, as part of
We’re happy with our current reach, but we want to add a minimum of two networks per year” Carl Grivner, Colt Technology Services
investment plans that could top €500m in total over the next five years.
“We’re going to have to continually invest, but I think budgets will shift from hardware to software. That means a shift in the type of engineers we use, as you will need software engineers. I don’t think that investment can stop, because the vendors will continue to make their hardware better, faster, cheaper, but two years from now, someone will come in with an advantage over us and then we’ll have to reinvest.
“IP transit has gone the way of voice in terms of the cost structure; 10-15 years ago it was €50-60 per Mb but now it is less than a € per Mb in some markets, unless you go to China where it is €100 per Mb. “We’re happy with our current reach, but we want to add a minimum of two networks per year. We haven’t finalised the locations yet but our next two will be in Asia and then we will look at second tier cities in Europe. “We will continue to expand and want to do two or three networks per year. That will be additional to our other investments, and we expect to put around €400-€500m in to our networks over the next three years.”