Internap reported results for its fiscal 2014, a year that was quite eventful for the company. The year was a tipping point for a transition from colocation provider to hybrid services. The company moved out of the Google-owned carrier hotel at 111 8th Ave. in New York and into its brand new data center in New Jersey. Its revenue stream also widened during the year due to the acquisition of iWeb toward the end of 2013.
Full-year revenue was $335 million, up from $283.3 million in 2013. Data center services drove top-line growth, and IP services continued a slow decrease in revenue.
While IP service revenue has been flat or shrinking for a while, the company believes it to be a differentiator in the market. Ninety-five percent of data center customers use the IP service.
The acquisition and impact of hosting provider iWeb was thoroughly discussed on an earnings call. iWeb revenue growth was in the low single digits, lower than the initially projected estimate of 10 percent. Churn of two hosting customers on the large side and a modest exchange rate impact affected results. However, iWeb was more profitable this year under Internap, with very healthy EBITDA.
One big benefit of the iWeb acquisition has been the acquisition of a different route to market via iWeb’s e-commerce selling capabilities. These capabilities are promising, as Internap continues the transition into a provider of hybrid services. Selling through the web has seen faster growth than traditional enterprise sales models, and it means much shorter sales cycles than traditional colo deals.