SingleHop Acquires Datagram

SingleHop revealed that it is acquiring Datagram, a provider of hosting services located primarily in the Northeast.

That acquisition comes on the heels of deal two months ago in which SingleHop acquired Server Intellect, a provider of consulting services focused mainly on Microsoft Windows Server.

SingleHop CEO Zak Boca says that acquisition of Datagram also represents an expansion of the data center services the company offers. Previously, SingleHop only provided access to infrastructure-as-a-service (IaaS) offerings via data centers located in Chicago, Arizona and the Netherlands. Datagram now adds hosting services in New York and Connecticut that enable customers to deploy their own IT infrastructure in data centers managed by SingleHop.

“Right now we have 1,500 servers under management,” says Boca. “Datagram enables people to now bring their own servers and SANs into our data centers.”

Datagram will continue to operate as an independent business unit of SingleHop, and effective immediately, will be able to deploy its services across all SingleHop data centers.

While Boca acknowledges that competition in the IaaS and hosting business is fierce, he says there are classes of enterprise customers that need access to IT infrastructure that is only one hop or less away from an Internet peering exchange. In the age of the cloud Boca says that applications deployed in the cloud are especially latency sensitive. As a result, there is something of a mass application migration underway that is witnessing the deployment of enterprise applications on IaaS platforms and hosting centers rather than inside traditional data centers or public clouds.

A big reason for that shift, says Boca, is that applications that require five milliseconds or less of latency can’t be delivered via a public cloud such as Amazon Web Services or even a local data center. As a result, there is a significant amount on industry consolidation in the hosting sector that is being primarily driven by the need to concentrate cloud application workloads around Internet peering exchanges.

The degree to which enterprise IT organizations will want to make use of existing SingleHop servers running VMware or Microsoft Hyper-V virtual machines versus deploying their own servers and storage in a hosting center will vary.

In the case of the IaaS offering, Boca notes that all the risks associated with IT capital investments are assumed by SingleHop. In the case of the hosting service, the enterprise IT organization is still responsible for both acquiring not only the server and storage infrastructure, but if they so choose managing it as well.

Although Boca would not make any specific commitments to additional types of acquisitions, he did acknowledge the company is looking to expand the range and scope of the data center services it provides; assuming, of course, in a highly volatile market SingleHop itself doesn’t become a target on someone else’s acquisition list.