This evening, Time Warner Cable (NYSE:TWC, news) announced that it has signed a deal to buy hosting and cloud provider Navisite (NASDAQ:NAVI, news, filings) [a subsidiary of Time Warner Cable (NYSE:TWC, news)] . The purchase price of $5.50 per share represented a 33% premium above the stock's closing price today, and amounts to a total pricetag of $230M. They will combine NaviSite's managed hosting and cloud services with their SME-focused Business Class division. Many will see this as a direct response to Verizon's purchase of Terremark, but it's more of a parallel thing aimed at very different segments of the market. While both Terremark and NaviSite were active in developing cloud services, their target markets didn't really overlap too much nor does NaviSite have a presence at the carrier neutral facility level such as Terremark's NAP of the Americas.
TWC and the other big cables have been making big inroads into the enterprise networking marketplace in the last year or two, leveraging both metro fiber and their HFC depth. With this move TWC jumps deeper into the managed services arena, greatly expanding their addressable market. Is the SME really ready to jump to the cloud? Many won't need it of course, but there are an awful lot of them and the cables have specialized in meeting their needs of late. The whole segment has been neglected by the ILECs for so long....
I must admit though, I thought it would be another big telecom doing the buying of a datacenter/cloud provider rather than a cable MSO. I will have to expand my brain a bit to think what similar assets Cox, Comcast, Charter, and Cablevision might be interested in.
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