Executive Interview with Zayo on Market Trends and AI Infrastructure

Hello, everyone. I’m Richard Murray, chief commercial officer at Telarus, and today I am joined by Chris Nein, senior vice president of channel sales at Zayo. Chris, thank you so much for joining me today for our executive interview.

Hey, Richard. Great to be here. Really appreciate the opportunity to speak to the advisory community.

I wanna start. You sit in such a great position of being able to look at not just what’s happening at your company, but you… You’ve always got really great thoughts on the broader ecosystem and what’s occurring within the technology sector. I’m just really curious about your thoughts around some of the current market trends that you’re seeing.

Yeah. I mean, there’s a couple things, and you can’t go anywhere without saying AI first here, right?

And obviously, that’s driving a lot of the conversation.

I think there’s two different phases of that that are happening right now. The immediate thing that we’re seeing is the development of, you know, where the GPU clusters are gonna live.

You know, the data center campuses that we’re hearing a lot about in the news for you know, many, many different reasons.

Zayo’s at the forefront of building the infrastructure to those campuses, and connecting you know, those GPU clusters eventually to the enterprise users who are gonna benefit from. So we certainly see that as a huge trend in our business, and what really that means for Zayo is network expansion like we’ve never seen before. The amount of fiber we’re building is pretty unprecedented.

Construction crews are out there every day, expanding our network to places where we’ve never been before.

The other side of that is the actual users, and the strategies that CIOs and CSOs are talking to us about, about connecting to AI, and using AI, but securing their data too, and the things that they’re really concerned about as adoption of AI continues, and really it advances beyond just LLMs and other of chat GPT and clawed use cases, and into very specific use cases for their industry, whether that’s healthcare or law or other areas that we’re seeing where AI is very prominent. So, you know, starts it, but also, you know, we can’t forget that edge networking and application performance is still at the forefront. We still build, very, very big connections, but also the routing around those connections.

Several of the deals that we’ve done recently have had some regulatory requirements that were pretty unique around securing data for our customer’s customer, and we’re seeing a lot of that as well. So a lot about application performance and a lot about AI.

AI is definitely in the forefront, and I think, you know, you touched on well on how you guys are covering that. One of the areas I feel like you guys have adjusted aside from just building fiber was the Crown Castle acquisition to help accommodate that. Can you just maybe give the group an update on where that is and how they can take advantage of it?

Yeah. It’s really exciting. That deal was done and completed on May 1.

And for the channel community, the exciting part is on August 1, our groups came together. So we are one channel program.

It is all Zayo now. We’re one Zayo team, and we act that way, and the tools that our partners are using and our own team are using are the Zayo tools. Now we’ve integrated the best of Crown Castle into that as well. You may heard the term Fiber Co.

We throw that out because Crown Castle’s still Crown Castle in the tower business internally, and even on our bills, we refer to this group as Fiber Co. So if somebody hears that term, that’s natural. But inside Zayo, we’re really excited about the metro reach, the fiber assets that we acquired provide for us. Zayo was always the long haul network, and Crown was always the metro strength, and now you bring those two together, and so you get the strength of long haul, and sort of the grid of metro, and you put them together, the connectivity, as I mentioned, you know, you’re connecting data clusters in AI with users.

Well, a lot of those data clusters are in places where networks didn’t exist before we build and require long haul, but where are the users gonna be? They’re gonna be in the metros, and our ability to make that work for the users now is pretty unprecedented in the industry.

So within that, I know you guys have a lot of different products, a lot of different offerings that you have, but if I forced you to pick, what are the one or two top products that our advisers would be negligent to not be out representing Zayo to their customers? Where do you where do you see us winning together that they need to make sure they they take away from today?

Yeah, mean, I’m gonna throw out the first two products are waves and big DIA connections, and we even have a great spiff out there right around on net waves and DIA, so we’re putting our money where our mouth is, And then…

But we can’t forget about the managed services portfolio that, you know, is fairly new to Zayo that not that many people remember that Zayo acquired QoS networks. We acquired ENA networks. We integrated the voice services from ENA and Allstream into that managed services portfolio. But remember, we are an infrastructure company at heart.

Everybody would tell you we are a fiber services provider. We love that business, big infrastructure. But in order to serve the enterprise, we realized that we also had to be able to provide services over that infrastructure. So waves in DIA to be able to connect data centers and big hubs, but also manage services to be able to deliver the applications to the users where those users wanna be.

Talk to me about consumption based products.

With NaaS, with, you know, there’s a lot of discussion across the technology sector about consumption.

Where do you guys see that? Is it fully here? Is it coming? Is it something to prepare for, or are we already there?

Yeah. I think we’re there. I mean, you know, NaaS certainly is a new term, and and Megaport has has done that for a long time and is kind of the brand that people talk about.

But Zayo introduced a product a little over a year ago called Dynamic Link, which is our flexible, you know, infrastructure solution. Dynamic Link is our NaaS product.

The the unique thing for us is, although we are a non net fiber company, and we certainly want the connections to be on Xeo, this product allows all connections, both type one and type two, to work at…

In these multi service ports. You know, what we know customers are concerned with a number of things. They’re concerned with visibility into all of their locations, and this product offers that visibility. They’re concerned with security of their data and the services they put across the network, and this helps with solving for the security, and they’re also concerned with flexibility.

They don’t wanna make long term commitments. They have projects that require short term bandwidth or adjustable bandwidth. Flexibility, right? They require that, and this product offers that.

So these multi service ports can be turned up, can be turned down by the users themselves. It doesn’t require a change order come to us in weeks of management.

And and just a couple of short words or, you know, a quick thought. What what is something that, in your mind, differentiates Zayo from the competition right now?

I I mean, I think it’s the fact that we own the network, but we offer the the full suite of managed services over the top of it. You know, you’ve got MSPs that traditionally don’t own their own fiber, and you’ve got fiber companies that don’t do the managed services quite the way we do or or are getting out of that business, have tried to be in it and are exiting it. We’re fully committed to both.

We obviously, again, fiber infrastructure company at heart will always be that way. We love seeing manhole covers with zeal on them and flags out on the street to show where our fiber is. But we also know that servicing the enterprise requires a different level and a different product set, I should say, than just, you know, raw infrastructure. So the ability to deliver those managed services over our own network and provide that flexibility and security to people who are looking for, pretty unique.

Alright. Great thoughts overall, Chris. I really appreciate it. Any closing thoughts that you want our advisors to walk away with?

Yeah. I mean, listen, Telarus is a great partner for us. You guys do more deals than we do probably with anybody else. What we what we wanna be able to do is expand the product portfolio across your community.

We want people to to absorb everything that Zayo can do, and think, hey, listen, when I have an opportunity for a managed network, for somebody who’s putting SD WAN in, for a NaaS network, even for a voice service. No one’s ever said voice and Zayo in the same sentence before, but we have a great voice product. So really what we want is adoption across your community. Ask us if we can do it.

If we can’t, okay, we’ll we’ll be happy to say that’s not the best fit for us, but we can do a lot more things than the Telarus community traditionally has brought us in. And that’s understandable, because this is…

A lot of this is new, but we’re ready to serve those enterprises.

Alright. And how do they do that, Chris?

Well, there’s a couple different things. We’ve got our Telarus national team, folks ready to support you every day, but we also have a large team of channel managers out there in the field that are geographically placed, ready to go work with the advisors, directly with the customers in the meetings. Engineers, channel managers, you know, the entire staff. We’ll throw an army at a deal. We’ve proven that time and time again that we’re ready to support the advisors when they bring us into opportunities.

Excellent. Well, thank you so much, Chris, for joining me today. Everyone, it’s been a great conversation. Thanks for joining us. Take care.