Friday, January 28, 2011

Verizon buys Terremark and goes for the cloud in a $1.4B buy

WorldWideTech & Science. Francisco De Jesús.


Verizon Communications Inc. has acquired Terremark Worldwide Inc. in a cash-for-stock deal value at $1.4 billion.

While significant in its potential reach and early-mover status, the move by Verizon does follow a trend toward more operator involvement and ownership of enterprise services delivered in the cloud.

"Communication service providers continue to transform themselves into technology providers. We see this issue in spades with the Verizon acquisition of Terremark," Steve Hilton, lead analyst for Analysys Mason's enterprise research program, wrote in a note to clients.

The deal, which will close later this quarter, comes at a 35% premium over Terremark's closing price per share when the agreement was reached.

“Cloud computing continues to fundamentally alter the way enterprises procure, deploy and manage IT resources, and this combination helps create a tipping point for everything as a service,” said Lowell McAdam, president and COO at Verizon. “Our collective vision will foster innovation, enhance business processes and dynamically deliver business intelligence and collaboration services to anyone, anywhere and on any device.”

Telecom operators currently provide 9%, or $1 billion, of global cloud services revenue to enterprises, but Analysys Mason projects operators' share in the market to jump to 23% by 2015 to the tune of $8.2 billion.

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