Lumen Technologies (NYSE: LUMN) recently announced the creation of an innovative network interconnection ecosystem, the ExaSwitch™, developed in collaboration with tech giants Google and Microsoft. A disruptive step forward, ExaSwitch™ provides organizations with high bandwidth requirements the ability to route their traffic dynamically between networks without the need for third-party intervention.
This on-demand optical interconnection system has the potential to rewrite the way enterprises, and the IT ecosystem, interconnect, procure, and manage connectivity. Early adopters include Lumen, Google Cloud, Microsoft Azure, and an undisclosed large cloud provider, all routing traffic between large internet and cloud networks. With additional participants set to join, the ecosystem promises improved automation, scalability, and capacity management.
Lumen’s Chief Technology Officer, Andrew Dugan, has boldly declared that “the days of slow, legacy cross connects are over.” By leveraging optical switching, large network backbones no longer require a physical location to connect. Instead, they can establish high-capacity optical links between metro sites, enabling rapid deployment of necessary capacity across all forms of data traffic exchanges.
For ExaSwitch participants, the benefits are multi-fold. Via a self-service portal, they can swiftly configure and establish connectivity with other participants. Connections can be set up in 400G increments, consumed on demand in 100G increments, and each site can support up to 25.6 Tbps of optical cross connects. Moreover, participants can connect their edge sites, data centers, and central offices in major markets for added diversity and cost-saving on cross connects.
Currently, Lumen is operating the ExaSwitch platform in three major US interconnection hubs – Chicago, Dallas, and Virginia – with plans for expansion across all major North American markets boasting large internet hubs.
Lumen’s shares were up 17.5% in Tuesday’s daily trading session following the announcement of this groundbreaking partnership with Google and Microsoft. This surge was compounded by favorable data on the inflation front.
As Lumen continues its strategic transformation from copper-wire based services to those built on superior-performance fiber optics, ExaSwitch emerges as a vital stepping stone. The company also looks forward to edge computing and managed network services as core facets of its turnaround, although the market appears cautiously bearish about the push.
Despite a recent rally, Lumen’s stock is down about 59% year to date. However, at less than 15% of this year’s expected sales, there’s substantial upside potential if the company can make significant progress with its transformation.
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