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Windstream (WIN): Cloud Segment Strong, Competition Rife

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On Dec 19, we issued an updated research report on Windstream Holdings, Inc. . The company is well positioned for long-term growth based on its investments in fiber-to-the tower and broadband networks and proper cost management.

Of late, Windstream has adopted a number of steps to expand its business. The company has been adding a number of data centers, employing efficient sales people to boost the top line and improve customer satisfaction, and investing in diverse business channels. Windstream’s new units are being constructed to cope with the growing demand for data center and cloud-based services from customers all over the nation. Also, it has expanded its fiber-based high-band Wavelength Division Multiplexing (WDM) or "Wave" service to cater to the demand of enterprise customers for dedicated, high-bandwidth data center connectivity solutions. We believe the company’s network expansion will continue to generate and diversify its revenue stream, going forward.

Moreover, Windstream has launched new cloud-to-cloud disaster recovery management solutions that will replicate mission-critical virtual servers and data to provide an alternative system for cloud-based disaster recovery to customers. The solutions will also secure customer applications by replicating data from their private clouds into a cloud in Windstream’s cloud data center. Moreover, according to an estimate by research firm Gartner, the present size of the Disaster Recovery as a Service (DRaaS) market is approximately $1.3 billion, with a related CAGR of about 30%.

The dynamics of the communication industry is significantly governed by technology innovation. Accordingly, leading national carriers aggressively pursue the introduction of networking technologies and next-generation product and service offerings. Top-tier carriers such as AT&T Inc. (T - Free Report) , Verizon Communications Inc. (VZ - Free Report) and Sprint Corp. (S - Free Report) have deployed 3G networks across their coverage markets, apart from investing in the rollout of 4G technologies such as Long-Term Evolution (LTE) and WiMax. Increased availability of these new technologies may result in greater competition for Windstream’s broadband Internet business.

Windstream currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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