Finally, some action in 2011. Today it was announced that Verizon will purchase Miami-based Terremark for 1.4 billion. This is an excellent play for Verizon since Terremark is well positioned and a solid, but not crazy, buy. You may remember that in 2009 VMware spent 20 million on a 5% stake in Terremark. I got the feeling, at the time, that VMware wanted a part of the public cloud space and they also wanted a little control on how the business develops and gets delivered . Now with those shares being bought out by Verizon, it will be interesting to see what control VMware has on the new Verizon subsidiary. I would not be surprised to see VMware announce an investment in Savvis or Rackspace in the coming months. VMware received a nice return on investment having bought their shares in Terremark at $5 a piece. Verizon is paying $19 per share to buy Terremark. That should nab VMware a nice check somewhere around $76 million. Pretty good return on less than a 24 month investment. I would be very surprised if they did not use that to invest in another cloud provider real soon. What are your thoughts?
Jan 282011