Terremark Cloud Computing
Terremark's Enterprise Cloud [IaaS]
The main differentiator is we're using partnering with VMware and using its technology as the back end.
--Terremark Executive Jason Lochhead
On Jan 27, 2011, Verizon Communications made an announcement that it would be buying Terremark Worldwide for $19 a share. The deal was valued at $1.4 billion.
Telco's like Verizon, ATT and others have been making aggressive moves into cloud computing. Verizon in particular has been lagging behind other Telcos like ATT in this regard. With this acquisition, Verizon, is poised to play competitively in the cloud computing space. The offer represents a 35 percent premium to Terremark’s closing price on Jan 27th, 2011. The board of Terremark unanimously approved the deal.
Terremark Worldwide (NASDAQ:TMRK) is a leading global provider of IT infrastructure services delivered on the industry's most robust and advanced operations platform. Leveraging purpose-built a dozen data centers in the United States (Miami, Virginia, Dallas, Northern California), Europe and Latin America and access to massive and diverse network connectivity from more than 160 global carriers, Terremark delivers government, enterprise and Web 2.0 customers a comprehensive suite of managed solutions including managed hosting, colocation, network and security services. They are listed as a leader in the upper right of Gartner's December 2010 Cloud Provider Magic Quadrant. The full report is available free from competitor Savvis.
VMWare owns 5% of Terremark and the two companies have partnered to provide vCloudExpress which links an enterprise's internal data center to external clouds from Terremark. VMware has a large customer base, and there is interest in getting access to the VMware cloud on a pay-as-you-go basis. Their market is Fortune 1000 companies who are looking to get operational efficiencies in a tier 3 or tier 4 facility. Customers pay monthly for a fixed pool of resources where they can run virtualized applications.
Terremark also offers Virtualized Disaster Recovery. Based on NetApp storage and VMware’s vSphere technologies, VDR provides a diverse set of array-based, host-based, and application-based replication options, support for physical or virtual source servers. On-demand managed security services like intrusion detection, log aggregation, firewall services, and on-demand managed backup services protect customer applications and data at similar or higher levels of security than required in their production environments.
Here's a customer success story from Terremark's October 2009 press release:
ShawCor Ltd., a global energy services company, is leveraging the flexible design framework to reduce risk, as well as cut overall consulting and implementation costs. In addition, the on-demand scalability offered by Terremark’s innovative solution allows ShawCor to dynamically add capacity above its baseline requirements to meet its real-time needs.
“With operations that span seven divisions around the world, the consistent availability of our core applications are fundamentally critical to the success of our company,” said Paul Gibson, ShawCor’s IT Manager. “By utilizing the cost-effective, cloud-based disaster recovery solution Terremark offers, we were able to replace a large capital expense with an affordable and predictable recurring charge while maximizing the uptime for our mission-critical systems. Terremark’s solution provides full recovery capabilities in 15 minutes, which we have successfully tested from our Houston data center to the NAP of the Americas.”
Another customer is moving their Windows solutions to Terremark and then their Sparc systems which won't virtualize to Terremark's co-location centers to consolidate two data centers into one.
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Terremark's balance sheet is highly leveraged and they just completed a $420 million convertible debt deal where they pay 12% at the end of each year. That puts them in a big hole against the competition. $250 million of the offering was used to repay prior debt.
Terremark's 2009 revenues are expected to be over $260 million with over $100 million in colocation and $130+ million in managed hosting. They do not have a line item for cloud revenue.
