What Does Verizon Expect from the CloudSwitch Acquisition?

What Does Verizon Expect from the CloudSwitch Acquisition?

Verizon is betting big on cloud computing. After this year’s $1.4 billion acquisition of data center operator Terremark, Verizon has once again loosened its purse strings to buy cloud computing startup CloudSwitch. The latter develops software that eases the transition of company applications from in-house servers to the cloud. So, what does Verizon expect from this acquisition?

For one, Verizon expects to use CloudSwitch’s capabilities to offer its customers seamless migration to the cloud. CloudSwitch integrates with cloud providers’ public application program interfaces (APIs) to make moving an application or workload to the cloud as simple as a drag-and-drop action in a Web browser. “With CloudSwitch, applications remain tightly integrated with enterprise data center tools and policies, and can be moved easily between different cloud environments and back into the data center based on the requirements of the business,” Verizon said.

In this way, CloudSwitch acts like a “cloud broker”. According to Ellen Rubin, former marketing head at Netezza and co-founder of CloudSwitch, without such brokering capabilities, enterprises would have to configure all of those parameters manually – a costly, complex and time-intensive process. CloudSwitch’s location in Boston also played a part in the acquisition, considering it gives Verizon to the considerable talent pool in the region.

While CloudSwitch had relationships with both Amazon and Terremark, this acquisition may actually help the latter differentiate against its larger rival. As David Skok, general partner with CloudSwitch investor Matrix Partners put it, “The game being played in the cloud is being dictated by what Amazon is doing, but we’re still amazingly early in the game, even though the hype would have you believe that everyone’s doing it. There’s an enormous opportunity to create an enterprise version of what Amazon is doing.”

Terremark’s, and by extension Verizon’s interest in enterprise cloud software is not unexpected. While Terremark built its business around enterprise clients and some of the world’s largest organizations, they have been slow to move to the cloud, unlike smaller businesses that have flocked to Amazon’s cloud service. With this acquisition, Terremark can expand its portfolio beyond traditional data center services, like collocation, and into cloud computing.

CloudSwitch was not the only company on Verizon’s radar, revealed Rubin. “What we had was really best in breed, and they (Verizon) are strong believers that to be a successful cloud provider, you need to have software development capabilities,” she explained as to why CloudSwitch was chosen.

Founded in 2008, till date CloudSwitch has raised about $15 million from Matrix Partners, Atlas Venture and Commonwealth Capital Partners.

By Sourya Biswas


Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society and has been a prolific writer to CloudTweaks over the years... http://www.cloudtweaks.com/author/sourya/

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