Level 3 Communications (NYSE:LVLT, news, filings) added another target market for its content delivery portfolio: the feds. They have added their CDN services to their WITS-3 contract vehicle, which handles common pricing for all federal agencies operating in the National Capital Region.
They’re positioning it as a cloud offering, enabling federal agencies to comply with the Cloud First policy amongst other such initiatives. CDNs have always been clouds in a way, but over the past few years they have been happy to layer on the new buzzword.
Level 3 is in a good position to serve CDN services to federal agencies, since they can do it directly rather than through partners, being the only major backbone operator with its own CDN infrastructure of this scale. That being said, federal dollars tend to take a long time to evolve, and the market is acutely nearsighted right now when it comes to the company’s organic growth.
The company’s financials are now starting to show substantial benefits from the integration of Global Crossing, so the last big hurdle is for them to prove that with better cash flows they can start to drive meaningful growth next year. Next month’s earnings report will be closely watched.
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