Verizon may sell or spin off cloud arm

Rob Powell/Telecom Ramblings
21 May 2015
00:00

Rich Tehrani over on his TMCnet blog has a source telling him that Verizon is looking to sell or spin off its Terremark cloud division 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.

This article was authored by Rob Powell and was originally posted on Telecomramblings.com

Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.

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