Verizon to Spin off Cloud and What We Can Learn

I have a solid source “in the know” who tells me Verizon is looking to spin off its Terremark cloud business as well as its reseller arm which sells PBXs. The idea is the company wants to focus more on mobile and moreover, Verizon’s Broadsoft-powered hosted solutions will be the only ones the company offers.

While mobile is a cash cow for the company, cloud is not going away. However, there is less ability to differentiate cloud services so perhaps this is the reason for the company to explore options. Eventually they may be thinking, Amazon will own the space. In terms of PBX resale of companies like Avaya, the idea is to get away from premise equipment and move to cloud. Verizon will be focusing on its own Broadsoft-powered solutions going forward.

I wonder if this latter move makes sense. What if your company doesn’t want a hosted voice system? Will Verizon lose the relationship? Moreover, will a competitor sell the on-premise-based phone system and broadband at the same time? We’ll see.

The rumored suitor is CenturyLink – not a surprise to me. I met with the company a few weeks back and most of the conversation revolved around all the acquisitions the company has made recently. They show no signs of slowing down.

Back to Verizon, with the AOL acquisition, the carrier is now in the content and video advertising business. Perhaps the execs thought they could only focus on so many things at once?

Bottom line, if the tip I received is accurate, Verizon is looking to get out of businesses which are commoditized and focus on ones where it can differentiate. This doesn’t apply to content of course – much of AOL’s writing such as Huffington Post has competition. It remains to be seen if some of these assets gets spun off as the rumors have said.

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