Terremark Snaps Up DS3 DataVaulting To Expand Storage Services

Miami-based Terremark on Thursday said it acquired DS3 for $11.2 million in cash. Privately-held DS3, Fairfax, Va., was founded in 2002, and had angel investment totaling about $6 million.

With the acquisition, DS3 has become the Backup division of Terremark, said Stacy Hayes, president of DS3 until the acquisition and now a Terremark vice president.

DS3 has been providing backup software and service in partnership with Toronto-based Asigra, Hayes said. The company was a 3D Hybrid partner with Asigra, a designation it now brings to Terremark, he said.

As an Asigra 3D Hybrid partner, Terremark can either offer backup services directly to its own customers, provide the technology and know-how to help other managed services providers add backup services to their own line card, or resell the Asigra software to enterprises who can then use it to create their own services, Hayes said.

For Terremark, the acquisition was a way to quickly develop a storage backup service.

"Terremark found us because they want to focus on the Asigra technology," Hayes said. "They were interested in us because we have the Asigra 3D Hybrid partnership. They said, since we have it, they'll buy us instead of building it themselves. If they didn't buy us, we could have helped them develop the service."

In addition to the Asigra relationship, DS3 brings a strong VMware expertise, especially its suite of disaster recovery services based on VMware, Hayes said.

"Terremark sees us as a way to inject themselves into this business rather than doing a slow crawl," he said. "We got them in a lot faster."

For DS3, the acquisition is a chance not only for its angel investors, including Hayes, to get a return on its investment, it's also a chance to grow.

"This is a business of economy of scale," he said. "As we grow, the per-unit cost of delivering storage to customers continues to fall. Terremark, with its brand and its international footprint, will enable us to grow."

With DS3, Terremark also gets new services that will help it become a provider of enterprise-class cloud computing services, Hayes said.

"The cloud has a lot of scary stuff, including contractual obligations for uptime," he said. "Terremark brings to the table enterprise-class cloud services. It brings customers to the cloud, but with enterprise-level-required reliability."