FiberLight deal helps validate Global Capacity business model

A new deal with FiberLight, coming less than two weeks after a similar deal with Megapath, suggests that Global Capacity’s One Marketplace Access Exchange has found a viable market niche.

The One Marketplace business model, which aims to facilitate carrier and enterprise connections to access links outside their home turf, has gained “traction, depth and reach over the last 18 months,” said Global Capacity Chief Operations Officer Jack Lodge, in an interview.

The One Marketplace Access Exchange was established to address the needs of managed service providers, as well as carriers wanting to serve enterprise customer locations outside their home market. Such customers are “challenged with understanding who is available in a market,” explained Lodge. Often such companies may buy from a major carrier such as AT&T or Verizon, but often the major carriers are actually reselling access services from other carriers, resulting in what Lodge called “margin stacking.”

Global Capacity aims to provide better pricing and to simplify the price quoting process. “The One Marketplace Access Exchange is an automatic pricing and ordering system for the access market,” said Lodge. If customers have specific resiliency or diversity requirements, the pricing and ordering system can be set up to provide only information about access providers that meet those requirements. Buyers typically are unaware of who the underlying supplier is, however, because billing is done through Global Capacity.

“From the customer perspective, it provides access to automated pricing to the entire marketplace through an automated web portal,” said Lodge. “From the supplier perspective, we’re exposing them to customer demand they might not otherwise see.”

Both Megapath and FiberLight will be buyers as well as sellers on the One Marketplace exchange. Both companies also are using a capability Lodge said only One Marketplace offers. Customers like Megapath and FiberLight can load negotiated supplier rates into the system and use the system to automatically generate cost information for individual access links.

Complementary to Ethernet exchanges
Typically the connections ordered through the One Marketplace exchange are private line services such as DS-1 up to optical level circuits. Lodge said the company is seeing a “dramatic increase” in Ethernet-based services as well.

But although what One Marketplace does sounds a lot like the role of Ethernet exchanges, Lodge said the two types of exchanges are actually complementary.

“Ethernet exchanges map connectivity between providers at an exchange location, but what they don’t offer is access,” said Lodge. In order to use a carrier Ethernet exchange, customers have to get to an exchange location—and Lodge believes the One Marketplace Exchange could be a great tool for achieving that.

“We’re in discussions with a number of exchanges about being their automated access provider,” said Lodge.

When a customer makes a decision to purchase an access connection through the One Marketplace exchange, Lodge said “there is still a provisioning process.” Technicians at the underlying supplier level still have to establish the connection. He added, though, that “We’re working on ways to drive further automation throughout the process.”