Verizon to Sell Terremark?

May 20th, 2015 by · 7 Comments

Rich Tehrani over on his TMCnet blog has a source telling him that Verizon is looking to sell or spin off its Terremark cloud arm and focus on mobile. Also supposedly on the block is Verizon’s PBX reseller division, leaving them only their Broadsoft-powered hosted PBX platform. 

I have no idea if the rumor is true or whether they would find buyers willing to meet them on price if they did.  But I find it fascinating that Verizon would want to sell the cloud division and the data center footprint. That they wish they could spend every penny on mobile I understand. However, one has to see the cloud as a part of the mobile ecosystem that even if one might be able to do without today, one wouldn’t want to lack it tomorrow. Verizon just agreed to buy AOL to get more into content and advertising, but is interested in getting rid of where it lives?  The Terremark purchase has always seemed like one of their better, longer-thinking moves to me.

Verizon is almost defined more by what it doesn’t want these days. It doesn’t want to own copper, let alone maintain and upgrade it. It doesn’t want towers, even if others do love them a whole lot these days. It wishes it hadn’t built FiOS and doesn’t want to build more of it. It doesn’t really have an interest in mobile markets outside the USA, and it definitely doesn’t want to share Verizon Wireless with anybody. And now, perhaps, it doesn’t want data centers or the cloud or any legacy PBX. It’s getting to be a bit like that old SNL skit, “If it’s not Scottish, it’s crap!” but with post-paid US mobile subscribers who read the Huffington Post.

If the rumor is true though, I do agree that CenturyLink does make plenty of sense as a buyer. I rather think they’d jump at the chance, in fact. They didn’t pull the trigger for Rackspace, but Terremark is more about the underlying assets and larger customers than Rackspace is, and therefore probably easier to integrate with the business they have built off of Savvis by sprinkling it with acquired nextgen cloud talent.  On the other hand, I’ll bet private equity would love a chance to get its hands on Terremark as well.

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Categories: Cloud Computing · Datacenter · ILECs, PTTs

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7 Comments So Far

  • Anonymous says:

    I’ve heard rumors of CTL and VZ discussing a whole lot more than just this. Most of the rumors I’ve heard center on CTL purchasing the VZB assets. These rumors come from within CTL and VZ. With so many rumors, it’s my thought that something is in the works between the companies and the scope of the deal hasn’t been finalized. Something is up though…

    • Rob Powell says:

      VZ selling VZB’s fiber as well as the datacenter/cloud biz? That would certainly shake things up a bit! I still find it a bit hard to fathom a deal actually emerging from it all though.

  • Grant Lewis says:

    I think its interesting that VZ might divest Terremark and quite possible it can / would occur judging by the “noise” I am hearing on folks looking to leave given the uncertainty of their future. But i find it hard/difficult to believe that VZ would divest fiber … even if they are looking to focus on core wireless they still need fiber for backhaul. So if there’s telco assets potentially being divested its more than likely associated to the traditional LEC services but look for them to keep fiber (most if not all) for their wireless radio access network backhaul.

  • red says:

    just rumors…

  • PGT says:

    As a former TMRK employee, if they spin off the company….good luck making it work. The majority of the braintrust left long ago once it was clear Verizon really didn’t intend to do anything with the company. They really didn’t do any planning about how to integrate the company prior to acquisition either.

    If VZ sells off the assets, its like a retailer clearing out last season’s goods for pennies on the dollar to improve cashflow. Still….the physical data center assets are worth *something* to somebody but lots of the larger customers moved on long ago.

    • Anonymous says:

      as for the physical assets: I was checking out the site, and cannot see who would really need these, especially in total.

      There isn’t anything original in them that isn’t already well covered. Why settle for second rate addresses in the DC or silicon valley area or HK when you have so many big time facilities already there?

      Who has the original set of assets that might fill in a player like EQIX or DRT: such as south Africa, India, middle east, Korea, Kuala Lumpur, Taiwan, etc?

      • Anonymous says:

        One caveat, I would say the Miami NAP is interesting if for no other reason than its the main jump point for all south American traffic into the US. Other ones might cover a gap in regional DC coverage, like Coresite or Viawest. But I wonder if they would really piecemeal it out like that…?

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