Thursday, 10 January 2013

Does INetU Acquisition Mean Expansion In Europe?

INetU, an international managed hosting provider based in the U.S. state of Pennsylvania, has been acquired by private equity firm BV Investment Partners. The acquisition comes by way of a recapitalization agreement between the private equity investor and INetU founder and chief executive Dev Chanchani.

Neither of the companies has released details of the transaction, but the fact that it is a recapitalization suggests BV increased their equity and share through a combination of debt conversion and cash infusion. In either case, INetU will use the new investment money to further its expansion goals.

Those goals exist on two levels: pushing INetU's revolutionary gated cloud computing environment and increasing their European footprint. Last year the company opened a new data centre in Amsterdam to fuel the start of their European operations. At the heart of the European expansion was the opportunity to introduce gated cloud computing to potential customers at ground level.

According to company officials, one of the problems with shared cloud environments is the fact that customers have no idea whom they're sharing space with. INetU developed their gated cloud community as a means of offering larger enterprise customers a safer environment populated only by organisations with the best reputations.

The gated cloud environment takes virtualisation to the next level by grouping high-end enterprise customers together and offering them dedicated hardware. It is a significant change for INetU; a company that has long focused on the managed services portion of their business at the expense of hardware. Their expansion into Europe may end up being the driving force causing them to take a more serious look at hardware.

The Company's European Future

When it comes to data centre news, it is not uncommon to hear stories about companies like INetU getting into the European market. What is unusual is seeing an equity investor like BV Investment Partners getting involved. Being that they've been a successful private equity business since 1983, we trust they know a good investment when they see it. The question is, how much of the investment money will stay in America and how much will actually make it to Europe?

In fairness, INetU is a 15-year-old company that has been steadily growing and expanding throughout their entire history. Their consistent growth indicates they have a strong vision and are prepared to move into the future; hence the desire to open the Amsterdam data centre to connect Europe with facilities in Chicago and Erie, Pennsylvania.

If the gated cloud-computing environment sees good success among high-end European enterprise customers, it could pave the way for greater European expansion in other places. Dublin, London, and Frankfurt are certainly not out of the question. As for INetU's European customers, they have the opportunity to get in on the ground floor of something that could potentially shape the future of the cloud in Europe.

In any event, BV Investment Partners would not have invested in INetU if they believed the company had no future. Whether or not European businesses directly benefit from the investment remains to be seen. Nevertheless, the confidence shown through the BV deal is pretty strong proof INetU will be around for some time.

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