Colt gallops into crowded US market counting on European experience and a software advantage

Carl Grivner

As Colt Technology Services launches its new US network, connecting multinational enterprises and financial firms to Europe and Asia, Carl Grivner, the company’s CEO talks to VanillaPlus. To succeed in a market it admits is crowded, Colt is banking on a software-driven network that fundamentally rethinks the model for intercontinental data services.

VanillaPlus: What’s the market opportunity that attracted Colt Technology Services to launch operations in North America?

Carl Grivner: In strategic terms, our goal is to continue to be one of the most customer-oriented businesses in the industry and expanding into the United States drives that strategy forward. I firmly believe that is we look after that, everything else will follow.

There are several specific market opportunities. For one, the opportunity to deliver the kind of next-level, personal service that the incumbent telecoms providers (of which the US market has its fair share) are struggling with. That’s a big differentiator for us.

Next, our dense connectivity and established credentials in Europe (where we have the continent’s densest connectivity) and Asia, make Colt an attractive proposition for multinational US enterprises with footprints in these regions.

In fact, I believe it’s fair to say that it’s our prominence in Europe and Asia that is driving the opportunity in the US for us. That strategy, at least initially, will be an outside-in one. That is to say we won’t be targeting businesses that are wholly contained within the US, but rather those that have footprints that play to our strengths in Europe and Asia.

VanillaPlus: When and where will it launch?

CG: We will launch our North American operation on June 19, 2018, from the continent’s financial gateway, New York City.

VanillaPlus: This is a crowded market; what is Colt’s USP? Why would enterprises and financial services choose you over proven US-based providers?

Carl Grivner: Yes, it’s a very crowded market, and the consequence is that there’s increasingly very little difference between the offerings of the incumbents.

CG: Unlike our competitors, we have no intention of serving the consumer market. We’re laser-focused on B2B, and specifically large multinationals which are disadvantaged because of the network services that underpin everything they do. I say ‘disadvantaged’ because the digital market is all about meeting B2B customer needs but with a stance that is more common in the consumer market.

This consumerisation of B2B is a new phenomenon that places intense pressure on service providers to move to a new model where they need to be super-responsive, very flexible and delegate control of decisions about bandwidth and connectivity directly to the customer.

This is our underlying philosophy; we don’t have legacy network and we have a challenger culture that stretches all the way back to challenging the local incumbents when the market deregulated in the UK 25 years ago.

Jeremy Cowan

I feel that we hold ourselves to a higher standard than most carriers do, our customers receive what they need, not just what we’re able to supply. This includes security, coverage, reliability, competitive pricing, and intimate customer service.

Colt is targeting just three sectors in the US which align with our expertise – enterprise, capital markets, and wholesale.

Our capital markets value proposition bears special mention. We offer highly secure and reliable access to the financial markets with direct-line connectivity and latency as close to zero as we can, since we have a shared responsibility for the profitability of financial firms.

Our Colt PrizmNet is essentially a financial extranet, with cloud services provided by AWS, and it’s been chosen by multiple firms because it’s a specialist network that meets unique requirements. It connects a global ecosystem of market participants to upwards of 115 financial exchanges, venues and service providers. Connected firms enjoy rapid, cost-effective access to any other connected organisation and full control of their connectivity services via our online portal.

VanillaPlus: How does the “software-driven” nature of Colt’s new network help your customers? Do you have a cost advantage?

CG: Our intelligent, purpose-built, cloud-integrated network – aka the Colt IQ Network – is the new standard in high bandwidth network services for enterprise and wholesale customers. It connects more than 850 data centers globally, with over 26,000 on-net buildings and growing, and is the reason Colt is recognised as a pioneering innovator in software-defined networks (SDN) and network function virtualisation (NFV).

In addition, the software-driven nature of our network allows us to put control of customers’ connectivity, bandwidth and even billing directly into their hands, via our On Demand Services. Thus, customers are no longer hamstrung by the need to wait upon a provider to scale their services up or down, but instead can flex their own bandwidth as required, in near real time.

We definitely have a cost advantage. The proposition is very simple: only pay for you use. This would normally be a very complex and often unsustainable proposition for competitors, because their networks are relatively inflexible.

US SONET networks were never designed with this in mind and so unfortunately flat fee pricing still dominates. Again, the consumerisation of the B2B, and to some extent, wholesale market, will over time see the modification or elimination of these old-school pricing models. Of course, we’re seeking to drive this change, and our first-mover advantage will be a powerful tool for our US business.

VanillaPlus: How big is the network you are offering?

CG: We have just connected 13 major cities, including New York, San Francisco and Chicago, to our Asian and European metro networks, which comprise more than 850 data centres and 26,000 fiber-connected buildings, and connect 200+ cities.

Our network spans four continents and moreover connects our financial customers to the key financial hubs around the world. We’re offering up to 100G connectivity, primarily Ethernet-based but if there’s a specialist requirement, we’ll be selling private wavelengths.

VanillaPlus: Can you give an example of how Colt has been able to support what you describe as “in the moment decision-making” in a way that your competitors could not?

CG: Consider the financial markets and the pressure that a single large market announcement can bring to bear upon connectivity and bandwidth. It follows that the ability to scale this capacity to meet demand, with just a moment’s notice, will dramatically impact an organisation’s ability to make and announce decisions on the fly – making it more agile and better able to respond to the rapidly changing business dynamics of this digital era.

Another good example is where a large US enterprise needs connectivity to multiple countries in Europe. More than likely, this company will have to work with several service providers to achieve their objective.

Each individual service provider engagement requires a large number of duplicative agreements, and service provisioning which can take weeks or even months. By contrast, we offer a single relationship with our customers because we own the network, and that eliminates the bureaucratic nature of service provisioning; we’re faster and we’re more flexible.

Coupled with automated provisioning and the ability for the customer to control their own locations and bandwidth, enterprises can respond to market dynamics specific to the own business and market. It’s not quite ‘in the moment,’ but by comparison, our customers are free to consolidate on their own strategy without the baggage that comes from forming relationships with many service providers, over a very fragmented network, by which time, the market has moved on.

Ultimately, our goal is not only to power the network and connectivity, but to actually drive new opportunities – rather than just servicing existing ones – for enterprises to match their capabilities to the demands of the digital market; we help reduce the bottom line while helping drive the top line.

Carl Grivner was interviewed by Jeremy Cowan the editorial director and publisher of VanillaPlus.com

About the author:

Carl Grivner was appointed chief executive officer of Colt in January 2016. He joined Colt having spent 3 years in Singapore as CEO at Pacnet, directing the global strategy of one of Asia’s leading end-to-end communications service providers. Prior to that, Carl was CEO of XO Communications, a US network provider, for eight years where he played a key role in transforming the business from a local exchange carrier to a national carrier.

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