With the AboveNet purchase waiting in the wings, Zayo Group (news, filings) today cleared its plate of other matters. They have announced the completion of the integration of the longhaul network assets of 360networks.
This doubles their national network reach, gives them full transcontinental reach, and brings intercity connectivity to eleven previously isolated metro assets across the western half of the country. 360networks’ intercity fiber isn’t a minor asset, deriving from the old Touch America buildout.
Zayo just closed the 360networks acquisition a little over four months ago, demonstrating once again their integration prowess. AboveNet, however, will be their biggest such challenge by far once they close the deal this summer. AboveNet also comes with intercity assets in the form of fiber IRUs on the former WilTel footprint, but of course their main assets are of the Tier 1 metro variety.
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Categories: Internet Backbones · Mergers and Acquisitions · Metro fiber
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This may sound like a bias comment but intgration and ability to integrate are situation specific. Level 3 didnt stub there toe because of Wiltel, the toe stub came trying to integrate Telcove, ICG, Looking glass and there clec business of thousands of buildings, switch service and T1 type services. If Level 3 was judged on Genuity there claim of consolidator and integrator would be that theya re huge successful and efficient. I expect Zayo to complete Abovenet very effectively because it is mainly a darkfiber sales company, complexity etc is not the same as others using Level 3 as an example
While AboveNet surely has a dark fiber business, really they have more lit services nowadays and their WAN stuff was growing the fastest. But of course it’s not as difficult as what Level 3 tried to do a few years back, it’s definitely doable. It’s just their biggest project to date.
Does anyone believe this? Ask anyone who has worked at Zayo in the past this is all misdirection and telling Wall Street what they want to hear. If “integration” means saying it is integrated and making the sales teams post stuff in SalesForce.com then yes it is integrated. The Zayo “Culture” is NEVER say something is not integrated or you will be fired (for failing to do integration). All you have to do is tour their facilities and see the labels saying “PPL” or “Fibernet” everywhere and see all the jumpers labeled with crazy circuitIDs to know its a lie. But if everyone in the company SAYS its integrated – well then I guess by some definition it is.
The thing about integrations is eventually whatever chickens remain loose eventually come back home to roost. Thus far, Zayo’s track record has been very good on this front – although obviously it hasn’t pleased everyone along the way (what does?). I suppose the difference is in what one considers to be ‘integrated’, as there is always more work to be done.
What was there to integrate? 360 had a national, LH network. Zayo didn’t. They had sales and corp people to integrate but that is an org chart update. Next chapter more interesting – Abovenet has people, departments and assets (and a 10 year head start).
Past performance is no guarantee of future performance, but it sure is encouraging. Zayo was recently recognized by Atlantic-ACM for streamlining the billing process for its customers, one of the primary challenges of integration work. To Rob’s point, there’s always more work to be done and it’s largely just how you look at it.
Full disclosure: I work at Zayo.