U.S. cloud vendor gobbles up Canadian SMB hosting provider

Montreal-based iWeb, an IT infrastructure provider to SMBs has been acquired by Atlanta-based cloud vendor Internap for $145 million.

iWeb does have a reseller and hosting program and has been working towards an international presence and customer base will aid Internap’s reach globally as the company was built with online sales in English, French and Spanish. iWeb also provides Internap with an upgrade in its employee base (200 people), corporate offices and four data centres in Canada. iWeb serves about 10,000 SMB customers in about 100 countries.

The combined companies could have estimated revenues of about $320 million. In its fiscal year ending September 30, 2013, iWeb delivered approximately $44 million of revenue and $11 million of EBITDA.

Eric Cooney, president and CEO, said iWeb fits perfectly into the company’s strategy to deliver a comprehensive portfolio that can serve the needs of 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 centres around the world.

iWeb’s cloud hosting offerings will be integrated into Internap’s existing portfolio of bare-metal and virtual cloud, managed hosting and colocation services.

Marketplace consultant McKinsey & Company estimated the worldwide SMB market for IaaS to reach $26 billion by 2015.

Carl Brooks, an infrastructure services analyst at the 451 Research Group, said 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,” he said.

“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.”

Christian Primeau, president and CEO, said the Internap-iWeb combination is naturally synergistic, as both are committed to developing IaaS solutions to drive the next generation of Internet and cloud applications.

Internap recently reported revenues of $69.6 million, up two per cent versus the third quarter of 2012. Its data centre services revenue was $45.5 million, up eight per cent versus the third quarter of 2012.

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