Internap acquires iWeb

Internap Network Services Corporation has announced plans to acquire hosting and cloud provider iWeb in a deal valued at approximately $145 million. The combination creates a top five pure-play IT infrastructure services provider, with trailing twelve months revenue in excess of $320 million. Headquartered in Montreal, Canada, iWeb serves 10,000 SMB customers in more than 100 countries and has approximately 200 employees.
“iWeb fits perfectly into our strategy to deliver a comprehensive portfolio that can serve the needs of our customers at every stage of their business lifecycle, from an initial start-up wanting a single dedicated server to a scale-out Internet app provider or global enterprise requiring a hybrid solution across multiple data centers around the world,” said Eric Cooney, president and chief executive officer of Internap. “This combination represents a milestone in the transformation of Internap’s business to a leading IT infrastructure services provider that can deliver on customers’ complete range of IaaS demands.”

The worldwide SMB market for IaaS is estimated to reach $26 billion by 2015 according to McKinsey & Company. Named a top 10 global dedicated hosting provider by 451 Research, iWeb has built an international brand and revenue base with SMBs using a go-to-market strategy that combines an efficient online sales channel, inbound digital marketing and multi-lingual (English, French and Spanish) sales, marketing and customer support. In its fiscal year ending September 30, 2013, iWeb delivered approximately $44 million of revenue and $11 million of EBITDA. iWeb’s dedicated and cloud hosting offerings and the added scale it delivers complement Internap’s existing portfolio of bare-metal and virtual cloud, managed hosting and colocation services while significantly expanding Internap’s addressable market – allowing the combined company to readily meet the complete range of IaaS demands of Internet-centric companies from start-up to webscale.

“Internap’s acquisition of iWeb speaks to several trends at the front of the IT infrastructure landscape today. The first is the continuing trend of acquisition and consolidation among infrastructure providers. Internap is gaining a new geographic foothold by acquiring a business that it understands very well in iWeb,” said Carl Brooks, analyst, infrastructure services at 451 Research. “Second, demand from enterprise is for a broad range of infrastructure capabilities from multitenant public cloud to bare-metal servers and managed services that increasingly display key aspects of IaaS, like self-service, automation and on-demand consumption. Providers that offer this can have an advantage in meeting diverse workloads and growing demand for agility from end users.”

iWeb builds on Internap’s successful acquisition of cloud provider Voxel in December 2011. The integration of Voxel’s product offering resulted in the availability of Internap’s high-performance AgileCLOUD virtual cloud and AgileSERVER bare-metal cloud services across five data centers worldwide. With its online sales channel and international capabilities, iWeb now opens up the global SMB segment for Internap’s complete IaaS portfolio.

Internap-iWeb combination bolsters R&D; delivers technology and revenue synergies
The combination of Internap and iWeb is further enhanced by the fact that the companies have made similar technology choices in building out their IaaS offerings. Both Internap and iWeb are active participants in the OpenStack Foundation, and iWeb was recently ranked among the top 25 code contributors to the project. Effectively doubling the size of Internap’s IaaS R&D resources, the combined team will focus on continuing to build performance and hybridization differentiation into the rapidly growing OpenStack community. The combination will also result in enhanced development velocity, allowing Internap to bring new IaaS features and functionality to market faster.

As the offerings are integrated, the combined customer base will benefit from one of the most compelling bare-metal, cloud and hybrid hosting portfolios in the industry. iWeb’s SMB customers will gain access to Internap’s broad geographic footprint of data centers, hybrid IT infrastructure capabilities, automated provisioning and high-performance network to support their business growth. Similarly, Internap’s webscale customers will gain the advantage of an even broader server offering with additional price points and configurations.

“The Internap-iWeb combination is naturally synergistic, as we’re both committed to developing innovative IaaS solutions to drive the next generation of Internet and cloud applications,” said Christian Primeau, president and chief operating officer at iWeb. “Our proven online sales channel and multi-lingual capabilities together with Internap’s global data center footprint, bare-metal and virtual cloud services and broad hybridization capabilities will allow us to deliver an unmatched combination of infrastructure options to more customers around the world.”

iWeb offers a number of customizable and pre-provisioned server options, as well as its proprietary Smart ServerTM solution, which combines virtualization with dedicated hosting. It also provides cloud hosting, colocation and managed services from four data centers across Montreal.