Terremark: Colocation Meets Managed Services

As managed service providers navigate a tough economy and longer sales cycles, Terremark Worldwide pursues a hybrid approach — mixing colocation and managed services — to keep the wolf from the door. Here’s the strategy so far.

The Miami-based company, which also operates its own Enterprise Cloud, this week captured a colo deal with World Fuel Services. Beyond the customer win, Terremark’s announcement suggests broader market demand for its services. The company’s flagship Miami data center “has expanded its footprint of sellable space … by almost 30,000 square feet” in recent quarters.

A spokesman for Terremark said both the colo and managed service sides of its business are growing at the moment. No surprise here: He said companies with increasing needs for compute capacity and shrinking IT budgets are turning to outsourcing.

Stifel Nicolaus, a regional brokerage and investment banking firm, gave publicly held Terremark’s go-to-market strategy a hat tip in a March research brief:

Stifel Nicolaus contends that the service mix exposes the company to “multiple market segments in which it could derive growth.”

The brokerage also cited Terremark’s Miami presence and ties to Latin America as a point of differentiation. While many MSP software providers evangelize moves into Asia and Australia, few are speaking as loudly as Terremark about Latin America opportunities.

Finally, Stifel Niclaus pointed to Terremark’s recent federal government activity. The government, not a hotbed for outsourcing in the past, has become more open to the concept. Terremark in February reported that the General Services Administration selected its cloud to host USA.gov.

The take away for MSPs: Go broad with multiple services, but go deep in specific verticals and regions.

Contributing blogger John Moore covers Master MSPs and Web hosts, and has written about the IT channel for two decades. MSPmentor is updated multiple times daily. Don’t miss a single post. Subscribe to our Enewsletter, RSS, Webcast and Twitter feeds.