MEF has certified Fortinet’s Secure SD-WAN services comply with the highest industry standards for SD-WAN Service Providers. “MEF 3.0 SD-WAN certification is a competitive differentiator that aims to help organizations make informed decisions when selecting an SD-WAN solution. We congratulate Fortinet on this achievement, which shows its commitment to addressing WAN transformation requirements of both service providers and enterprises.”
Fortinet started partnering with MEF in 2017 and has closely worked with the organization to develop SD-WAN standards and practices. Today there are now around 25 service providers that meet the 3.0 certification .
GTT CEO Rick Calder is stepping down
After a 13 year run that massively expanded GTT, their CEO is stepping down. During his tenure, Rick gobbled up a number of smaller telecom networks including Interroute, Persues and more. These acquisitions made headlines and drove substantial top line revenue, but added heavy debt. The company announced earlier this year that they wanted to focus more on networking and get out of the infrastructure business. GTT has begun selling assets especially in the APAC regions. It will be interesting to watch this story unfold. If GTT can bring in a CEO with experience consolidating their incredibly complex string of networks, they may be poised for major growth. Through their Telecom acquisition quest, they now have over 600 POPs (points of presence) worldwide.
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In January, GTT announced the incorporation of Fortinet Secure SD-WAN services. This was in addition to already having offerings from VMware (VeloCloud) and SilverPeak Unity EdgeConnect. at the time, Todd Kiehn stated, “Fortinet has been a long-standing partner of GTT, delivering network firewall solutions as a core aspect of GTT’s managed security portfolio.”
Diving deeper it appears that the acquisition of interoute gave them access to the aforementioned Silver Peak solutions. Interoute, one of the largest network providers in the EMEA region was a very large (if not the largest) acquisition made by GTT in 2018. The $2 Billion cash transaction expanded GTT’s coverage area broadly. It also gave them innovations as Interoute was seen as the only competitor to perennial networking innovation organization Masergy in Gartner’s Network Magic Quadrant. GTT has since fallen back into the niche category.
Reclaim old glory?
GTT Stock Performance
Now the Silver Peak solution is available in the Americas. It will be interesting to see if they can move the needle and reclaim growth and take market share. The SD-WAN space has become increasingly convoluted and we’ve been bullish on massive consolidation even during and post-pandemic. It is important to note that GTT has a variety of debt obligations that come full circle in the coming years and the general performance outlook is down short, mid, and long term from the Commodity Channel Index. In fact, since mid 2018 (shortly after the Interoute acquisition) GTT’s stock has been on a steady decline from $56 dollars per share to around $9 dollars a share.
Americas Expansion
IDC anticipates enterprise SD-WAN services to grow over 25% per year through 2023 in the Americas Region. GTT uses this metric as a key reason for their SD-WAN / Silver Peak addition stating, “The addition of Silver Peak Unity EdgeConnect expands GTT’s managed SD-WAN offering in the Americas and offers enterprises an attractive technology option to meet their specific network bandwidth and applications requirements,” stated Ghassan Abdo, research vice president, worldwide telecom at IDC. “GTT’s managed SD-WAN service allows enterprises to focus critical IT personnel on core business operational activity and provides substantial value-add in the management of complex network integrations, as well as helping conserve scarce capital resources.”
Has GTT Turned the Corner?
On May 8th 2020, GTT announced their financials for Q1 2020. It is interesting that while their YoY revenue was down 5%, their QoQ performance was up marginally. Given the beginnings of the pandemic, uncertainty and distractions, this may actually be a positive sign. Additionally, while EBITDA has decreased, their cash flow increased 37% QoQ and 157% YoY and their CAPEX decreased nearly half a % point as a percent of revenue.
The biggest concern with this announcement is can GTT provide a consistent reliable user experience across 3 of the top SD-WAN Services available today. If they can succeed in this area, they may be poised to seize the market as our society continues its digital transformation revolution.
Trusted SD-WAN Advisors
SDWAN Rankings exists to help you find the best solutions to help with your networking needs. Organizations selecting SD-WAN providers often rely on the partner community as trusted advisors to help select these networking technologies. We can help you select a partner that will help you through vendor selection at no cost. ever. If you’d like an introduction to SD-WAN vendors or partners, let us know.
GTT has announced major shifts on it’s earnings call today. The company plans to sell of and liquidate their massive infrastructure services. This was clearly a difficult decision, but necessary to remove those assets as they continue focusing on Software Defined services. As stated on the call, the company hopes this selloff will give them financial freedom needed to reduce their debt obligations driven by a half decade of massive SD-WAN acquisitions. The burden is already high (totaling more than $3 Billion) and will grow yearly through 2025. The biggest questions will be: 1. Can GTT find a buyer (They’re leveraging Credit Suisse and Goldman Sachs). and 2. Can GTT get the integrations complete.
The integrations continue to be a big hurdle for telecom. Companies that successfully integrate are going to thrive in this new era, but don’t be surprised if there is additional liquidation from failed integrations in the future.
Trusted SD-WAN Advisors
SDWAN Rankings exists to help you find the best solutions to help with your networking needs. Organizations selecting SD-WAN providers often rely on the partner community as trusted advisors to help select these networking technologies. We can help you select a partner that will help you through vendor selection at no cost. ever. If you’d like an introduction to SD-WAN vendors or partners, let us know.
