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Big Changes at CenturyLink’s Cloud Unit

November 30, 2015, 10:41 PM UTC
Sharks floating in clouds
John Lund/ Getty Images/ Blend Images

CenturyLink, a telecommunications company that pushed hard into cloud computing starting with its $3.2 billion acquisition of Savvis four years ago, followed by purchases of Appfog and Tier 3, is losing its two top cloud executives, Fortune has learned.

Jared Wray, who was senior vice president of platform and application framework development, is leaving the company as is Jonathan King, vice president of platform strategy and business development. A CenturyLink (CTL) spokesman confirmed both departures, which have not been announced.

King was heavily involved in CenturyLink’s acquisitions of Savvis, which in 2011 gave CenturyLink data centers for a cloud computing push; Appfog, which provided cloud software expertise; and Tier 3, a respected cloud infrastructure provider founded by Wray in 2006. King also helped drive acquisition of Orchestrate, a cloud-focused managed database service earlier this year.

A source close to the company said these exits indicate a strategic shift away from public cloud infrastructure where CenturyLink faced bruising competition from much bigger players, most notably market leader Amazon (AMZN) Web Services and Microsoft (MSFT) Azure.

In the public cloud scenario, the provider (say Amazon or Microsoft) operates massive amounts of shared computing, storage, and networking capabilities that are rented to multiple customers. Businesses are increasingly using those resources instead of adding to their own existing data centers.

Other telco-rooted cloud computing offerings including Verizon’s have also had trouble competing with the big boys. CenturyLink’s acquisition of Savvis, mirrored Verizon’s (VZ) earlier $1.4 billion buyout of Terremark.

CenturyLink has shown other signs that its cloud business is stumbling. Andrew Higginbotham, another top cloud exec, left in January while CenturyLink executives said on the earnings call a few months ago that they may sell off data centers. To be fair, a company doesn’t need to own data centers to run a cloud business. But CenturyLink’s comments raised eyebrows considering it had spent several billion dollars to get Savvis’ data centers not too long ago.

The CenturyLink spokesman said the executive changes do not mean a reduced emphasis on cloud. Rather, he said it would streamline product development using a flatter organization, he said.

Aamir Hussein, who joined CenturyLink last year as executive vice president and chief technology officer, appears to be running the show now.

The source close to the company said he thinks this new management decided CenturyLink had too many challenges ahead with Amazon to keep pouring resources into its rival cloud business. In his view, Wray and King were the cloud gurus at the company. The people Hussein brought on as well as the legacy CenturyLink people are more focused on networking products, he said. And, while networking is key, cloud is about a lot more than that.

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