It’s not a big secret that the wholesale industry is facing major changes. The growing demand for data services and higher bandwidths, coupled with an increased need for agility, means the industry needs to develop more intelligent ways of transferring capacity.
For PCCW Global, the international operating division of Hong Kong telco HKT, its latest acquisition will give it an opportunity to increase the depth of its capability around software development and agile development.
That, according to PCCW Global CEO Marc Halbfinger, was part of the thinking behind its acquisition in November of Console Connect, which Halbfinger officially unveiled days later at the MEF17 event in Florida.
The transaction involved two parts, with PCCW Global and HKT acquiring Console Connect’s platform, its assets, its intellectual property, as well as its technology team, led by CTO Paul Gampe.
The rest of Console Connect, including its network assets and customer contracts, were bought by Stephen Wilcox, the former founder and owner of IX Reach, which was acquired by Console Connect in 2015.
After making the official announcement, Halbfinger sat down with Capacity to explain PCCW Global’s plans for its part of Console Connect.
“The brand we feel is valuable. We acquired most the people and they have associated themselves with the brand. The development skillsets we acquired are quite deep, so we’re quite pleased,” he explains.
“Every network-based service provider needs to now increase the depth of its capability around software development, agile development to ensure services can be delivered to end users at the retail level and wholesale level as efficiently as possible.”
So what was Console Connect? The “Cloud Connection Company” was an enterprise software and interconnection company founded in 2011 by Al Burgio.
The company’s sophisticated, highly-automated connectivity platform provided enterprises direct access to an ecosystem of business-critical cloud infrastructure providers and other enterprises with the click of a button.
One key asset that is now owned by PCCW Global and HKT is the Console Connect platform, which “provides a platform of value from network to cloud”, according to Halbfinger. For PCCW Global, that could possibly be expanded further, Halbfinger explains.
“We believe that can be expanded to go from network to network, and perhaps cloud to network, depending on the retail distribution channels.”
Connect people
Another key consideration behind the deal was the technology team at Console Connect, who joined PCCW Global as part of the transaction.
The team, still led by Gampe, was instrumental in developing the Console Connect platform, and it was their experience and perspective on “development and carrier ‘softwarisation’” that will “help lead PCCW Global to the next of evolution in the network”, he adds.
“Until now in this industry we’ve had network engineers and software developers doing applications,” he adds. “Now what we’re seeing at the core infrastructure is the requirement for there to be software network engineers – people who understand both the IT development side as well as the physical layer. This Console Connect social media is going to be quite valuable for this community – it already is. All of this, we’ve acquired.”
Halbfinger adds that Gampe’s team is well versed in network orchestration and the software elements that are becoming increasingly important for modern wholesale and domestic networks.
“This is quite relevant as we announce it here at MEF, and MEF is about assuring standards-based orchestration of services from the software layer and the physical layer and for retail distribution services as well as inter-carrier framework, which has always been something that PCCW Global has excelled at the wholesale carrier interconnect,” he says.
“The acquisition positions our depth in agile development for the delivery of services for today and for the next generation. They [Gampe’s team] understand the network and understand the software development elements that now critical for any next-generation service provider that wants to be delivering services network to cloud in an on-demand basis. They excel in that space and that’s the reason we made this acquisition.”
With big bandwidth videos becoming more critical, PCCW Global trialled a live 360-degree 4K live virtual stream at the Hong Kong Sevens in April 2017. “We didn’t just look to deliver the live stream but to store it. At the 17-minute marker, my team phoned me to update me that we were up to 15Tb of storage and they asked me how much did I want it to continue to?
“This is an indication that, although there are applications that are evolving, the requirements to get to the behavioural insight will require infinitely more bandwidth and infinitely more storage capability and so on that even our early elements today of machine learning and AI capability are still not able to do,” Halbfinger said. “Let’s not get scared that some of the larger players are evolving the model, still bandwidth connectivity, storage capability and getting as close to the edge to deliver applications will be critical, including video delivery.”
Console split
The deal, which was brokered by the Bank Street Group, was marketed as a joint acquisition between PCCW Global and its parent company HKT. I ask Halbfinger about HKT’s involvement. “Console provides capabilities relevant to both the domestic network and to the international network, but the effort will be managed by PCCW Global,” he says. “HKT was involved because there was also an interest to see how the development team would be able to provide application of value to also the domestic infrastructure.”
As mentioned, the deal will also see Console Connect split up, with PCCW Global choosing not to acquire its network assets, which are set to become part of a separate business that will be operated as an independent global network platform under the name IX Reach.
So why did PCCW Global opt not to buy the whole thing? Halbfinger says the reason is simple – PCCW Global “does not need the physical network” because it has its own advanced global network, with infrastructure across the Americas, Europe, Africa, the Middle East and Asia, according to its website.
Halbfinger elaborates: “We already had a physical network that was arguably more robust than the one we would have acquired. We felt it was unnecessary to acquire a network we felt we already had.”
That meant customers also moving to the new IX Reach. “Because we didn’t want to take the network, we didn’t take the customers. They are leveraging the platform but sitting on the physical network, so we understood there would be a process. We’ll certainly try to find ways to collaborate.”
I ask Halbfinger to sum up why this deal is important to PCCW Global. He replies: “We’ve been providing services to enterprise for many years. Our mission statement is to provide global connectivity capability of voice, data, video and applications to service providers, multinational enterprises and to cloud. Here we are getting a network to cloud capability that has currently been mostly delivered to enterprises but it certainly also has wholesale capability.”
Bringing together a community
One of the key aspects of the acquisition is its senior development team becoming part of PCCW Global, meaning the wholesaler not only gets the code, but the people behind it.
That team is led by former Console Connect CTO Paul Gampe, who joined the company (then IIX) in 2014.
Gampe believes one of the key reasons PCCW Global bought the assets from Console Connect was to “get the code base and the application that we’ve built but they also get a development community that can help to take them further on the journey.”
Explaining the platform, Gampe says: “The internet is a great vehicle at getting packets from source to destination but it is fraught with challenges. If you’re trying to do real-time streaming or voice applications then you really need the ability to create a dedicated circuit from one point to another.
“What you encounter as you dig deeper into how the internet is constructed is that it is this wholesale network of networks.”
To complete an end-to-end circuit often needs wholesale operators to agree how to achieve it, but “we’re entering an era where the 30/60 day lead time to provision that service doesn’t meet the needs of industry”, Gampe adds.
