Jan. 9, 2003 -- Sometimes it's easier to acquire an established brand name than establish a new one.
Just nine months after 21 former COLO.com facilities were renamed ClearBlue, the ClearBlue brand is being retired, with the remaining facilities operating under the NaviSite name.
The change is part of a larger reorganization of the US hosting assets controlled by Unicorn Holdings, whose principals founded Global Switch.
On Dec. 31, Unicorn-owned ClearBlue Technologies integrated the providers it acquired in the previous 15 months, with the operating units going forward as NaviSite.
ClearBlue acquired a controlling interest in NaviSite last September 11. In the Dec. 31 all-stock "in-house" transaction, NaviSite purchased ClearBlue Technologies Management (CBTM), a subsidiary of ClearBlue that includes the former AppliedTheory managed services business. The combined entity will operate data centers in Andover, Mass. (53,000 sf), San Jose, Calif. (25,000 sf) and Syracuse, NY (20,000 sf).
In a separate agreement, NaviSite also took over the management of 10 data centers that had been operating under the ClearBlue Technologies brand, located in New York, Chicago, Dallas, Los Angeles, San Francisco, Las Vegas, Milwaukee, Emeryville, Calif., Oak Brook, Ill. and Vienna, Va.
“This acquisition is strategically important and brings a significant amount of applications expertise to NaviSite,” said Tricia Gilligan, CEO of NaviSite. “Not to mention, our expanded footprint of 13 data centers, including CBTM's Syracuse facility, extends our presence in key cities.”
The name recognition of NaviSite is among the benefits of the reorganization. NaviSite, which was founded in 1997, was initally part of the portfolio of companies funded by Internet incubator CMGI, which sold its controlling interest to ClearBlue three months ago.
The web sites for ClearBlue and AppliedTheory now redirect visitors to the NaviSite web site. The transition should be seamless for ClearBlue customers in those facilities, according to NaviSite chief financial officer Kevin Lo. "We have very strong facilities management experience," said Lo.
ClearBlue had an estimated 350 customers following its purchase of AppliedTheory's hosting business for about $25.5 million, which included AppliedTheory's intellectual property and Syracuse data center as well as a customer list that included the State Department, Johns Hopkins University, Lockheed Martin Corporation, Eddie Bauer and the Denver Broncos.
According to a Unicorn press release issued before the NaviSite acquisition, ClearBlue was anticipating revenue of $60 million and an EBITDA profit of $10 million for 2002. Lo said the new NaviSite will be profitable as it starts 2003.
“The additional revenues on our current operating platform gives us scale, and we expect EBITDA profitability post integration,” said Lo.
The 10 "strategic" ClearBlue sites to be managed by NaviSite are former COLO.COM facilities, and include 116,500 square feet of data center space, according to the NaviSite web site. ClearBlue predecessor BJK Investments bought 21 COLO.COM sites, totalling about 450,000 square feet of space, for $44 million in a bankruptcy sale in Sept., 2001.
The other COLO.COM sites acquired by BJK are no longer listed on the NaviSite web site. NaviSite's Lo said he had no information on the status of those sites.
What's clear is that NaviSite is ready to compete for customers. Its current hosting migration offer to customers of other providers includes free installation, a free cabinet, the first month's service for free, and eight hours of "rack and stack" assistance for free.
“We are committed to a being a leader in the eBusiness services industry,” said Andrew Ruhan, Chairman of NaviSite's Board of Directors. “This acquisition is a critical step in our overall strategy of leveraging our platform to profitably drive consolidation within this marketplace.”