CenturyLink Inc. (CTL - Free Report) recently unveiled Dedicated Cloud Compute (DCC) Foundation, which is an updated version of private cloud service.
This enhanced cloud service is currently moving to a converged, software-defined data center (SDDC) model, based on VMware, Inc.’s (VMW - Free Report) Cloud Foundation and Hewlett Packard Enterprise ProLiant server. Also, it is being offered to customers and partners in North America, Europe and Asia Pacific.
Notably, SDDC technology and hyper converged infrastructure deliver a single platform with software-defined infrastructure for deployment and management of all data-center resources. This includes compute, storage, networks and security built on an application program interface based, software-defined layer.
Designed to help overcome challenges like, lengthy provisioning, configuration errors and costly processes by the automation of labor-intensive tasks and operationalizing private cloud on demand, the combination of DCC Foundation and CenturyLink Cloud Application Manager is expected to enhance the multi-tiered hybrid-cloud configurations.
In fact, CenturyLink has been trying all means to establish itself as a global leader in cloud infrastructure and hosted IT solutions arena designed for enterprise customers. Additionally, the company’s strong network capabilities, integrated hosting and network solutions are likely to promote growth in its cloud business, thus boosting the company’s top line.
Moreover, in May 2017, CenturyLink and Level 3 Communications, Inc. (LVLT - Free Report) moved closer in completing their proposed merger after receiving approvals from almost 23 states and territories.
If the proposed merger finally materializes, it will increase CenturyLink's network by 200,000 route miles of fiber including 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents, consequently reinforcing the position of the company’s network capabilities.
Price Performance & Zacks Rank
Shares of CenturyLink have underperformed the industry’s gain in the last three months. The stock price declined 18.4%, as against the industry’s gain of 1.2% in the same period. The company currently has a Zacks Rank #5 (Strong Sell).
Going forward, loss in access lines, reducing legacy voice services revenues, tough competition, federal regulations and need to upgrade technology might remain headwinds for the company.
Stock to Consider
Investors interested in the broader Computer and Technology sector may consider a better-ranked stock like Arista Networks, Inc. (ANET - Free Report) , which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks has expected earnings per share growth rate of 22.00% for the last three to five years.
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