IT Expo West 2010 General Session: Cloud Computing Nigel Williams SVP Sales

1. IT Expo West 2010General Session: Cloud ComputingNigel WilliamsSVP Sales

2. 2009 Annual Revenue: $3.7B Employees: 5,200 Legacy and pedigree in support of wholesale customers with a pure IP fiber optic network Supporting mission critical applications for 000’s of enterprise customer Majority of Tier 1 cloud providers & SI’S on-net with Level 3 TODAY Level 3 Today • 53,000 intercity route miles and more than 27,000 metro route miles • More than 100,000 buildings lie within 500 feet of the Level 3 network • Network and telephone numbers in rate centers serving over 85% of U.S. households • CLEC provider in all 50 US States

3. Industry Dynamics – The IT Managers Nightmare Customer Expectation Loyalty Real-Time Tolerance Regulatory ISV Model OPEX =Capacity Planning Nightmare

4. How do you plan for so many variables? Application Capacity/Scalability DR and Replication Data Center Capacity Private or Hosted Server Capacity Virtualization Processing Capacity Network Capacity

5. again So What Enterprise IT Managers Want…. FLEXIBLE PRICING MODELS RESOURCE POOLING ON DEMAND SERVICES IMPROVED SLA’S ELASTIC CAPACITY LOWER COSTS DELIVERY OF SOFTWARE APPLICATION DATA STORAGE, RETREVAL AND MANIPULATION ON DEMAND PROCESSING CAPACITY

6. Cloud Adoption Today Non Mission Critical Application Security Implications Regulatory Compliance Network Connectivity thru Public Internet Application Sensitivity Success primarily in SMB Enterprise SLA’s ???

7. PUBLIC INTERNET PaaS Application Sensitivity Impacts Cloud Adoption OPEN/ INTERACTIVE WEB BASED APPLICATION Would ISV

8. Network Access Methodology Impacts Application Performance and Customer Experience Public Shared Software Shared Computing Shared Network Delivery Private Dedicated Software Dedicated Computing Dedicated Network

9. The Internet Leveraging the Level 3 infrastructure to deliver differentiated access Cloud providers will offer services differentiated by application sensitivity, criticality, QoS and performance Access methodology varies by segment and application sensitivity Level 3 Adaptive Cloud Finance & Healthcare NON CRITICAL BUSINESS CRITICAL Private Line (SONET) SECURITY SENSITIVE Retail & Manufacturing LATENCY SENSITIVE SaaS Wavelength (DWDM) Large Enterprise Private VPN (MPLS) IaaS SMB Consumer PaaS One size does not fit all The cloud must deliver the right quality of service and security Business Users Cloud Services

10. Financial Services Organizations Healthcare Providers Media and Entertainment Industry Large Enterprise Communitiesof Interest Mid-Marketand state/local gov. Level 3 – Delivering the Adaptive Cloud Leveraging the scale of our network to connect enterprise customers to multiple cloud providers Financial Services Providers Healthcare Solution Providers Entertainment and MediaSolutions Communitiesof Interest Tier 2 Cloud Service Providers Tier 1 Cloud Service Providers

11. IBM and Level 3 at NAB – Media Workflow

12. Level 3 Approach to Cloud Services All the components are complex but exist today - business models need to adapt Alliances and partnerships are key to enterprise flexibility and innovation Focus on core business and not compete with solution providers and VAR’s Enable SI’s, VAR’s, and Agents that wish to sell and deliver cloud services Continue to expand network footprint directly to cloud providers and enterprise customers

13. Summary Industry trends and complex capacity planning driving cloud services Enterprises demand differentiated access based on application sensitivity Level 3 will leverage network infrastructure and strategic partnerships to meet enterprise demand Level 3 creates an opportunity for agents/VAR’s that want to play in this market Bringing together buyers and sellers over a network optimized for cloud delivery