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'Cloud Computing' Pays Off for Miami Company

Terremark
Terremark’s computers are powering the federal government’s “cloud computing” effort.

The federal government is embracing "cloud computing" — putting reams of data on the web instead of internal servers — and it’s paying off for Miami-based Terremark Worldwide. The internet infrastructure and data center company is hosting and powering the effort’s two flagship sites, USA.gov — the federal government’s official web portal — and Data.gov — the publicly accessible repository of data generated by government websites. Data.gov alone is expected to grow from 50 feeds to more than 240 within months.

The fast-growing government business is just one reason Terremark closed out its fiscal year on March 31 with revenue higher than in the previous year. It added 46 customers just from January-March, including many companies looking to outsource some or all of their servers to cope with shrinking IT budgets and growing data needs. Recent new customers have included Linden Lab, maker of the Virtual Life online role-playing game.

Terremark Turnaround?

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Fiscal 2009 % Change from 2008

Revenue

$250.5 million +34%

Earnings

$61.3 million +57%
Net Loss $10.6 million -75% (from a $42.2 million loss)
Note: Earnings are before interest, taxes, depreciation and amortization.

"The downturn in the economy has actually played right into our strengths," Terremark CEO Manny Medina says. "We embraced virtualization five years ago, when nobody knew what virtualization was about."

Terremark provides its customers with everything from physical space, telecom connectivity and storage to application hosting and cyber security. Its services are built on the 160 or so telecom carriers that exchange traffic in its centers, which its other customers use to carry their web traffic.

But the company still faces hurdles. It is carrying plenty of debt from building out its 11 data centers worldwide, including the NAP (Network Access Point) of the Americas in Miami. Although its net losses continued to narrow and it paid off its entire credit balance with a $420-million private offering in June, some analysts have expressed concern about its debt load.