Friday, January 28, 2011

Verizon Buys Terremark for $1.4 Billion

The Wall Street Journal

The deal, Verizon's largest since its $6.8 billion purchase of MCI in 2005, comes as telecom operators are moving deeper into selling processing power, data storage and software hosting services over the Internet as their landline businesses shrink.
The acquisition could help the company secure more deals for such services—collectively known as "cloud computing"—and compete with companies like Inc., which runs a cloud-services business alongside its giant online store.
Kerry Bailey, Verizon business group president of cloud services, said the carrier has made cloud computing a key part of its growth strategy, in addition to the wireless business it runs with Vodafone Group PLC.
Verizon already operates more than 220 data centers in 23 countries. The deal for the Miami-based company would bring another 13 in the U.S., Europe and Latin America, as well as a strong position in federal government work.
Verizon said it plans to keep the Terremark brand and operate the new unit with its current management team as a wholly owned subsidiary.

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