Jan 282011
 

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?