January 28, 2011, 1:01 PM — Verizon Communications, which is giant in phone service and Internet access, but a bit player in cloud computing, is going to fix that by paying $1.4 billion for Terremark Worldwide -- one of the more sophisticated cloud-computing and hosting companies in the business.
The acquisition is the first big one of 2011, but it piles on a long list of cloud and virtualization mergers and acquisitions from last year.
Terremark's two primary competitors, Savvis and Rackspace, are the ones analysts are mentioning today as the most likely next candidates.
The ongoing consolidation makes it clear that the likelihood a provider will fail or be acquired continues to be one of the first criteria end-user companies have to consider when looking at cloud providers.
Verizon Business offers some online storage and cloud services from its 220 data centers in 23 countries, but has focused more on small-business services, VoIP, Internet access and other infrastructure issues than on offering platforms or applications.
Terramark, on the other hand, offers hosting and cloud services from 10 data centers worldwide, and customizes the level of abstraction and security for customers. Services range from high-security, dedicated private-cloud implementations for large government agencies to shared-resource clouds for enterprises to pay-as-you-go infrastructure plans for smaller businesses.
Terramark services are designed for all but the very largest companies that usually end up hiring global carriers as their infrastructure companies anyway, according to Chris Drumgoole, SVP of client services development at Terremark, who says the company has been growing about 30 percent every quarter since 2009.