Terremark and Verizon originally started out as partners in a group led by General Dynamics to service an Army cloud computing contract. By the time General Dynamics announced the contract award in early May, Verizon had acquired Terremark. The acquisition cost Verizon around $1.4 billion. This strategic buy gives the telecom and data network giant a much beefier infrastructure for its cloud business. It can definitely use the space since the competition for federal cloud computing heats up as traditional government IT contractors go head to head against commercial providers pursuing the lucrative government IT market. Telecoms companies like Verizon are pushing for a greater market share in the government cloud service provisions market. It is making the necessary acquisitions to buff up its cloud computing capabilities and infrastructure. According to Verizon, the acquisition is part of Verizon’s shift to “make cloud a primary capability,” said Verizon’s senior VP for public sector markets, Susan Zeleniak. She said that the Terremark purchase is part of the company’s transformation.
The Army contract with General Dynamics is valued at up to $250 million over the span of five years. Under the deal, Terremark/Verizon will provide infrastructure for the Army’s transition to the cloud. The infrastructure provided includes storage, networks, and servers.
Verizon is hardly alone in its use of acquisitions to get into or get a larger position in the government cloud computing market. For example, CenturlyLink bought Savvis last year. In addition to acquisition, there are big commercial cloud names that have migrated to the government market like Google and Amazon.