The Schwartz Cloud Report

Blog archive

Internap Extends Cloud Footprint with Voxel Acquisition

Looking to expand its global footprint and addressable market, cloud hosting provider Internap this week said it has acquired Voxel Holdings for $30 million in cash.

By adding Voxel, Internap can target smaller customers that require more automation and self-service implementation of cloud and hosting services. Internap addresses large enterprises that typically spend a minimum of $10,000 per month and as much as $1 million monthly, said President and CEO Eric Cooney, speaking Tuesday during an investor conference call announcing the acquisition.

Typical Voxel customers, by comparison, spend less than $10,000 per month and tend to require rapid, self-service provisioning of infrastructure.

Internap offers two cloud services. The first is its flagship Custom Public Cloud, based on VMware's vCloud Director platform. Custom Public Cloud is geared toward organizations running enterprise applications that require high availability. Also, in October, the company launched the first public cloud service based on the compute service of OpenStack, the popular open source platform aimed at building interoperable clouds.

Voxel's self-service platform runs on Red Hat Linux. While Voxel has closely explored OpenStack and even contributed to the community, it has not to date deployed OpenStack. Also differentiating the two companies is the fact that Internap owns its own datacenters, while Voxel rents its facilities.

Cooney indicated that in the coming quarters Internap will look at relocating some of Voxel's infrastructure into Internap facilities. Voxel, based in New York, has a large presence there, where leasing and powering datacenters can be more expensive than other locations. But Voxel also has a presence in Amsterdam and Singapore, giving Internap an expanded global footprint.

"With Voxel's strong track record in dedicated hosting and public cloud and Internap's robust collocation and enterprise hosting presence, we are now positioned to capture and hold customers through the majority of their IT infrastructure lifecycle," Cooney said.

Though Cooney forecast that Voxel closed out 2011 with a 25 percent growth rate, he suggested it lacked the sales and marketing infrastructure to compete with much larger giants such as Amazon Web Services and Rackspace. Internap has 60 direct sales reps and a network of channel partners that will help expand Voxel's footprint, while extending Internap's portfolio.

"We've been doing very well in the marketplace competing against the three major players in head-to-head RFPs, and now we look at this Internap deal and just clearly see a huge potential with combining that kind of product set and Infrastructure-as-a-Service platform with an established sales and marketing organization," said Voxel Founder and CTO Raj Dutt during the investor call. "So we're very optimistic we can continue to grow the business with that combination."

Will Internap transition the Voxel infrastructure to OpenStack? Cooney indicated that is the plan. "Obviously, they are separate platforms. We have not done the engineering development work to integrate the two platforms, but you can expect that top of our list of integration activities is to integrate those two public cloud platforms together," Cooney said. "Without putting too much of our future roadmap on the table, suggest to say that OpenStack we expect to be a key part of the long term platform."

Posted by Jeffrey Schwartz on 01/05/2012 at 1:14 PM


comments powered by Disqus
Upcoming Events

Redmond Tech Watch

Sign up for our newsletter.

I agree to this site's Privacy Policy.