Week of November 8, 1999
  Snapshot from the Field

Hot IP Network Player Global Crossing
Launches 10-Facility International Expansion Blitz

Living up to its name, Global Crossing (www.globalcrossing.com) has launched an international expansion blitz, angling for an edge in the great race for broadband supremacy. The Hamilton, Bermuda-based company, which is building and operating a global, fiber-optic network based on Internet Protocol (IP) technology, recently announced that it will construct what Global Crossing executives call "10 new multi-million dollar mega data centers" during the next year.

The 10 facilities, which company officials have dubbed "Global Centers," will appreciably expand Global Crossing's Web hosting and IP applications businesses in new international markets, company officials say.

"These new Global Centers will vastly increase our ability to offer our customers the combination of an advanced distribution channel for their content over the Internet, as well as a rich source of IP-based applications to help them operate their businesses," said Bob Annunziata, chief executive officer of Global Crossing.

"We said we would be delivering new, state-of-the-art products and services over our global network, and this expansion reinforces our commitment to that promise," Annunziata added.

'Technical Space' Rapidly Growing
In Telcos' Real Estate Portfolios

"Technical space" like Global Crossing's 10 new facilities is a major element in the hotly contested global race for broadband dominion. In fact, technical space is the fastest-growing segment of many telecom companies' real estate portfolios.

Consider, for example, Broomfield, Colo.-based Level 3 Communications (www.level3.com), which is building its own IP-ready global network. Since its founding in 1997, Level 3 has built 1.25 million sq. ft. (112,500 sq. m.) of technical space, more than any other telecom firm. And by yearend 1999, Level 3 anticipates a doubling of its tech space portfolio.

While technology-intensive "tech space" is rather pricey, most facilities aren't huge or labor-intensive. For example, Global Crossing's 10 new Global Centers will range from 30,000 sq. ft. to 50,000 sq. ft. (2,700 sq. m. to 4,500 sq. m.), company officials say.

Technical facilities, though, are an essential piece of the real estate pie for any operation that claims to be a contender in the great broadband race.

Global Crossing is certainly a competitor, and, like Level 3, one that's virtually come out of nowhere.

Global Crossing's Emergence

One thing that's fueled Global Crossing's emergence is its speed and aggressiveness in amassing a high-powered array of executive talent.

Company founder Gary Winnick, for example, reportedly put a US$2 million check on a table inside a Manhattan restaurant as part of convincing Will Carter, CEO of AT&T Submarine Systems, to jump ship and join the telecom upstart. Other major hiring coups include Global Crossing CEO Jack Scanlon, who was lured away from Motorola, where he was a senior executive.

Global Crossing's biggest weapon, though, likely lies underwater. The respected Gilder Technology Report (www.gildertech.com), in fact, says that the company "has a truly cosmic position as the supplier of the missing element that completes the global [Internet] system."

That missing element is Global Crossing's clout in undersea bandwidth, a major edge as the Internet takes on an ever-more global flavor.

In the last few years, for example, North America's share of worldwide Internet users has dropped from 80-plus percent to slightly more than 50 percent. Clearly, that indicates a fast, potentially vast expansion in the international Internet traffic carried by underwater cabling. As George Gilder puts it, "The submarine portions of the Internet will prove to be an agonizing choke point."

And that undersea choke point is an area where Global Crossing has already become an established major force. The company already services more than a third of the world's undersea cable miles, and it's rapidly increasing its total mileage. In fact, Global Crossing, through its subsidiary Global Marine, owns the world's largest fleet of cable-laying and maintenance vessels. It took only 10 months for the company to lay its Atlantic crossing cable.

Added to that undersea muscle is the IP-based global fiber-optic network that Global Crossing is developing. At present, Global Crossing has announced 88,100 route miles (140,960 km.) for that network, connecting five continents, 24 countries and 170 cities. When the network is finished, it will be available to more than 80 percent of the world's international communications traffic, company officials say.

Building Blitz Begins
In Australia and the UK

Global Crossing's technical space, such as its 10 newly announced facilities, is the land-based glue that ties the company's potent communications package together.

The company's building blitz will begin in Europe, where the company by the end of June 2000 plans to build Global Centers in London, Paris, Amsterdam and Frankfurt. Additional Global Centers in the Asia-Pacific and South America will be added as the network in those regions is completed, company officials say.

Global Crossing's new centers will complement the company's smaller existing Global Centers in Melbourne and London. Global Crossing has also announced that it is expanding its existing U.S. data centers in New York City, and adding new centers in Herndon, Va., and Sunnyvale, Calif.

Most of the new international facilities, say Global Crossing executives, will be located in much larger "Telehouses." Those Telehouses will connect customers to the company's high-capacity backbone network. In addition, the Telehouses will provide collocation space for customers' networks.

Combined with the company's global network, the new Global Centers will enable Global Crossing to introduce what a company spokesman calls "a whole host of advanced IP-based application services worldwide."

Global Crossing's new services, the spokesman says, "will begin initially with outsourced e-mail and then move into messaging, security, 'calendaring' and scheduling applications."



©1999 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.