Zayo Adopts AboveNet Channel Plan

Zayo Group is adopting the AboveNet channel program virtually as-is now that its acquisition of the big bandwidth company is complete.

Zayo Group closed its acquisition of AboveNet July 3 for $2.2 billion. The companies’ combined network operates in 45 states, seven countries and spans more than 61,000 route miles with 4.6 million miles of fiber. Their services include wavelengths, SONET, Ethernet and colocation. The network interconnection work should be done at the end of third quarter.

“The key message is it’s business as usual. There’s a new name and a new logo and more geography,” said David Howson, president of sales and customer management for Zayo Group.

Howson told Channel Partners that since Zayo’s channel effort mainly consisted of one-off deals, it is incorporating the AboveNet program into is sales efforts with minimal changes  the exception being tweaks to the channel leadership and reporting structure.

Angelo Germani, AboveNet’s vice president of sales engineering and sales operations, has been named the new channel chief. He is Zayo Group’s vice president of indirect channels, reporting to Howson. Brian Sheehan, AboveNet’s business development manager, has been named director of indirect sales, reporting to Germani. Previously, Sheehan reported to AboveNet’s vice president of sales Michael Brown, but Brown has moved over to the Zayo Group’s wholesale business as senior director of carrier sales.

The10-member AboveNet channel support staff, including sales engineers, customer service managers and sales operations support, have been retained and report to Germani.

Howson said Zayo Group is targeting a 25 percent increase in support staff by the end of the year based on expected success of the program.

And Howson does  project expansion in second half of 2012 simply by virtue of the added geography and products  namely unrestricted dark fiber and colocation that former AboveNet partners now can sell.

Zayo Group will honor existing AboveNet partner agreements and has no plans to change the terms or compensation, Howson said. New partners will sign Zayo Group contracts, but existing agents  aproximately 20 master agents  can sell under their existing paper, he added. In addition, Zayo Group will maintain AboveNet’s policy of having no protected accounts.

As for systems, partners will continue to use AboveNet’s platform, which is based on Fortuitously, Zayo Group’s back-office is based on the same platform, so the two are being integrated. “The front door for the agents hasn’t changed,” said Howson; they simply will be able to access more inventory.

Zayo Group has discontinued the use of the AboveNet name, but Howson said the sales and marketing teams will continue to leverage the cachet of the AboveNet name with enterprise customers for the next quarter.

For AboveNet partners, Howson said the primary benefit of being part of Zayo Group is the expanded footprint. While AboveNet had deep fiber in Tier 1 markets with wavelengths connect them, Zayo has a stronger inter-city network (via its acquisition of 360 Networks in 2011) and presence in about 80 Tier 2, 3 and 4 markets. Together the companies service 140 markets.

The product line is largely the same: dark fiber, wavelengths, Ethernet and IP services. The primary differences are that Zayo Group has not restrictions on the sale of dark fiber where AboveNet did and that Zayo Group sells colocation while AboveNet did not. AboveNet’s seven facilities have been added to the 13 Zayo Group already operates as zColo.

Zayo Group has been an active on the M&A front; Howson said that’s what it was founded to do. In the last five years, it has acquired more than a dozen companies. Going forward, he said the company is not planning anything nearly as ambitious as the AboveNet buy, but most likely will add in smaller companies to build out its footprint. The products and services won’t change, however.

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