CenturyLink has acquired Tier 3, the Seattle-based infrastructure as a service (IaaS), platform and advanced cloud management company. The amount of the acquisition was not disclosed. Tier 3 has $18.5 million in investment from Intel Capital, Ignition Partners and Madrone Venture Group.
It was the second cloud services acquisition for CenturyLink in the past year. In June, CenturyLink acquired AppFog, marking its entrance into the platform as a service (PaaS) market.
With the acquisition, Tier 3 will become part of the CenturyLink Cloud. Seattle will serve as the headquarters for the new Century Link Cloud group. Seattle is becoming a magnet for cloud services providers. Amazon Web Services, Windows Azure and Google Compute all have operations in the Seattle region.
The purchase of Tier 3 is primarily for CenturyLink to deepen its infrastructure offerings, which it provides through Savvis, which the telecommunications giant acquired in 2011. Tier 3′s nine data centers will be integrated with the 55 that Savvis owns. CenturyLink will add two to four data centers next year. Tier3 also has a PaaS offering called Web Fabric that is built on Cloud Foundry, the open PaaS now managed by Pivotal.
With the Tier 3 acquisition, CenturyLink is buying one of the most recognized cloud providers in the market, ranking high on the Gartner Research magic quadrants.
Tier 3 is known for its capability to manage complex workflows. It has the core characteristics of a cloud service. It is scalable, elastic, a self-service cloud services unified by a management interface.
For example, in August, I reported how Tier 3 launched the capability for architects to design network configurations in the public cloud that for the most part mirrors the networking common to internal data centers. With that capability, Tier 3 maintains customers can move enterprise applications to the cloud in a secure and compliant manner. The new capabilities include what Tier 3 describes as the ability for customers to create and manage load balancers for web applications, virtual LANs for building secure systems, site-to-site virtual private networks and custom IP ports for edge firewalls.
The advanced orchestration capabilities offered by Tier 3 gives CenturyLink one of the most sophisticated infrastructures in the market. It will allow CenturyLink to integrate its Qwest hosting, Savvis co-location and Tier 3 infrastructure cloud service into one package. AppFog will be added to operate on top of the CenturyLink cloud environment.
Tier 3 gives CenturyLink the ability to go deep in the enterprise. As I noted earlier this year, AWS, Google Compute Engine and Windows Azure are all programmable but a lot of it is manual work to get the services running.
This adds human capital costs to already tight IT budgets, said Tier3 Co-Founder and CTO Jared Wray, who will become CTO of the new CenturyLink Cloud.
In all, CenturyLink faces tough competition from other infrastructure providers such as Windows Azure. But the combined PaaS and orchestration management gives the company a unique, enterprise market play.