The market for cloud computing solutions may experience some shakeups in the near future. TMC CEO Rich Tehrani reported on a rumor that tech giant and mobile services provider Verizon will be soon be looking to sell or spin off its cloud business, Terremark.
Terremark is a managed and cloud services provider that offers data center space, managed services and IaaS capabilities to customers around the world. Verizon purchased the company in 2011 for $1.4 billion in hopes that it would gain customers in the cloud market. For a while, it seemed to be working. In 2013, Verizon Terremark was the original provider for cloud services that helped run the HealthCare.gov website. However, Terremark was responsible for a poorly executed rollout of the site, resulting in outages and technical problems that affected a lot of the website's traffic and also 14 individual health care exchanges run by different states. As a result, the U.S. government chose to replace the company with Hewlett-Packard Co., according to Reuters.
If Verizon does get rid of its share in the cloud computing market, it will focus more on mobile technology and its Broadsoft-powered PBX solutions, according to Tehrani. Verizon just acquired AOL and essentially entered into the video and content advertising business, demonstrating a desire to branch out into different fields besides mobile, but if Tehrani's information is correct, the company will abandon its only hold on the cloud computing market. Perhaps, Tehrani postulated, there were too many irons in the fire for one company to reasonably handle.
What does this mean for the cloud service market?
Verizon's decision to sever its cloud arm may impact the market by creating a void that other companies can fill. However, the prevailing idea, no matter what happens to Verizon in the future, is that cloud computing is here to stay. IaaS operations can benefit companies in numerous ways. IaaS can offer cost savings, which translates to money better spent on business growth and not on IT operations. It can also help companies maintain flexibility in their computing power, because they can customize their service to fit their computing needs as workflows expand or decrease. In addition, companies don't have to run their own servers and don't spend money on equipment maintenance. No matter what Verizon's decision is concerning Terremark, there will always be cloud-based services.