Hawaiian Telcom completed its acquisition Monday of a Honolulu-based data center services provider in a move that will allow the state’s largest telephone company to broaden its product offerings while diversifying its revenue base.
Hawaiian Telcom paid $16 million in cash for SystemMetrics Corp., a 2-year-old firm that provides a range of services to companies, including virtual data storage, cloud computing and other logistical support.
The deal, which was announced Sept. 5, marks the second major acquisition by Hawaiian Telcom in nine months. In December it closed on the purchase of voice and data provider Wavecom Solutions for $9.6 million.
Hawaiian Telcom for the past two years had been considering different options to expand and enhance its data services for customers, most of which had been previously provided by a third-party vendor. Hawaiian Telcom ultimately decided on SystemMetrics, which has an existing customer base of 400 businesses, said Paul Krueger, Hawaiian Telcom vice president for business and wholesale sales.
There is strong potential for such virtual data services in the Hawaii market where only 7 percent of businesses have cloud computing compared with 25 percent on the mainland. Cloud computing enables data to be stored at a remote location.
Hawaiian Telcom will be marketing the new service to both existing customers and companies who currently are served by other providers, Krueger said.
"This allows enterprise-level businesses to go from a physical server to a virtualized service," Krueger said. "We’re seeing a lot of success in that area because it’s expensive for companies to run their own servers, power them and build data centers of their own. There are a lot of efficiencies that come with virtualizing servers."
The new services dovetail with Hawaiian Telcom’s effort to increase the capacity of its fiber-optic network, which provides its customers with more bandwidth for a host of Hawaiian Telcom products and services, Krueger said.
"Just having that data network core allows customers to have a remote, diverse data center facility and have communications between those locations," he said.
From a standpoint of the company’s finances, the acquisition will provide a new revenue stream at a time when Hawaiian Telcom’s legacy land-line business is shrinking. SystemMetrics generates revenue of about $8 million annually.
"We have a number of business products that are significant contributors (to revenue), and this will be one of them," Krueger said.
Hawaiian Telcom’s shares closed up 9 cents at $26.55 Monday on the Nasdaq Global Select Market.
