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2013 Web Hosting Year in Review – Mergers and Acquisitions

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2013 marked a number of huge acquisitions in the web hosting space, with companies including GoDaddy and IBM closing major deals to help them gain more market share, expand their product offering, and acquire talent.

SoftLayer

The largest hosting acquisition of 2013 is IBM’s acquisition of SoftLayer, which closed in July 2013, and was rumored to be in the $2 billion range. SoftLayer was wrapped into IBM’s cloud services division, combining SoftLayer with IBM SmartCloud into a global platform. With the addition of SoftLayer, IBM made leaps and bounds into the cloud, and set itself up with a solid platform and team, surpassing $1 billion in quarterly revenue in its cloud division for the first time ever in Q3 2013.

Host Europe Group

One of the biggest acquisitions in the European hosting market in 2013 was that of Host Europe Group, also in July. Private equity firm Cinven Group acquired Host Europe Group for around $447 million from Montagu Private Equity. Following the acquisition, Host Europe acquired Telefonica Germany Online Services GmbH, a provider of managed and application hosting to SMBs, as well as German domain registrar domainfactory.

MediaTemple

GoDaddy acquired a string of companies in 2013 to align with its strategy of becoming a one-stop shop for small businesses in the US and abroad. With each acquisition, GoDaddy added a new tool or service designed to meet the needs of these customers, including Outright, a financial application for SMBs, and Ronin, a billing and invoicing tool. The most relevant acquisition to those in the hosting space, however, has to be its rather unexpected acquisition of Media Temple in the fall. Media Temple will be run as a separate business, and continue to run out of Los Angeles with its 225 employees staying on board. GoDaddy has big plans for 2014, including adding services in Latin America, and time will tell what the next year has in store for MediaTemple.

iWeb

Internap acquired iWeb in a transaction valued at $145 million in October, adding four data centers in Montreal and 200 employees through the deal. Internap said that iWeb’s dedicated and cloud hosting offerings will complement its existing portfolio of bare-metal and virtual cloud, managed hosting, and colocation services, while extending its North American footprint.

Tier 3

Building on its acquisition of Savvis and AppFog, CenturyLink acquired Tier 3, a public cloud provider, and rebranded it as CenturyLink Cloud. Tier 3’s products are expected to form the foundation of its cloud strategy and CenturyLink Cloud Development Center in Seattle.

Hostway

Near the end of the year, Hostway was acquired by LittleJohn & Co., a private investment firm who will serve as an active shareholder and board of directors, and support its efforts to acquire new customers and further differentiate its offerings.

SoftCom

Ingram Micro acquired Toronto-based web hosting provider SoftCom in September, to operate as a wholly-owned subsidiary. SoftCom, founded in 1997, offers cloud infrastructure services, domain name management and web hosting services.

Host.net

At the beginning of 2013, Host.net was acquired by Canadian private equity firm Novacap. Host.net co-founder and CEO Jeffrey Davis and Novacap acquired all the equiy in Host.net. Recently, Host.net added 5,000 square feet of diasaster recovery space in South Florida.

About the Author

Nicole Henderson is the Editor in Chief of the WHIR, where she covers daily news and features online. She has a bachelor of journalism from Ryerson University in Toronto. You can find her on Twitter @NicoleHenderson.

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