Earthlink (NASDAQ:ELNK, news, filings) has made another inorganic move, boosting its managed services capabilities with the acquisition of Sunnyvale, California-based CenterBeam. They’ve been working hard for the past three years now transforming from an ISP into a managed IT/cloud services provider, putting together the necessary network, datacenter, and services pieces together one by one.
CenterBeam provides remote IT services to multi-location enterprises via a 140-person strong IT support center. In particular, Earthlink hopes to use their expertise to roll out hosted collaboration services and unified end point management services. More generally, the help desk, desktop technical support, and application support will boost the managed IT side of Earthlink’s transformation and especially their TechCare offering. Much of that has been built from pieces acquired via M&A, including the helpdesk business from Synergy Global and Business Vitals.
The deal will cost Earthlink $22M and will be structured as an asset purchase to close early in Q3. That’s big enough that in addition to additional operational capabilities and scale we can expect it to contribute a relatively meaningful amount of revenue to the growing side of Earthlink’s business, although nothing huge.
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Been hearing that in some locations Earthlink is telling customers they are not renew last mile circuits as they are getting out of the business of being a CLEC. Not sure if that is only in areas that are not profitable or if that is a company wide change. The above article would seem to indicate that this is a general change of direction for Earthlink.
Not out of the CLEC business as a whole, but they are certainly cutting back on the pieces that don’t benefit the new model as much.