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Interliant, Inc.

The evolutionary path of Sage Networks into Interliant (NASDAQ: INIT) was aggressive. Sage Networks began an acquisition strategy in 1997, and continues to acquire both regionally and nationally focused companies. In 1998 and 1999, for example, Interliant Corp. spent $85.2 million acquiring companies. Interliant Texas was one of the acquisitions, and Sage Networks took the name Interliant for the entire corporation. March 10, 1999, the transaction for the purchase of Interliant by Sage Networks was complete, and Sage subsequently changed its name. Interliant continues to adhere to an acquisitions strategy and a reliance on software vendors for its outsourced products. Major shareholders include SoftBank Technology Ventures, with 3.3 million shares or 9.6% of total shares outstanding. Table 1 provides a list of 18 acquisitions completed by Sage Networks (now Interliant). These statistics are taken from the various documents that Interliant has filed with the Securities and Exchange Commission, in addition to their annual report.

Table 1

Interliant Acquisitions

Company Name

Primary Focus

Omnetrix, Inc.,

Web hosting

Clever Computers

Web hosting

Server and network connectivity assets from Knowledgelink Interactive

Web hosting

Tri-Star Web Computer

Web hosting

HostAmerica, a division of HomeCom Communications

Web hosting

All Information Systems

Web hosting


Web hosting

BestWare, Inc.,

Web hosting

B.N. Technologies

Web hosting

GEN International (Global Entrepreneur Network)

Web hosting

Dialtone, Inc.

Web hosting


Web hosting

Telephonetics International


Net Daemons Associates


Interliant Texas

Application hosting

Advanced Web Creations

Web hosting

Daily-e Corporation

Application hosting

Joint development with SoftBank and Vivendi via AtVisio

Piloting application hosting in Europe

Sage Networks' acquisition strategy has yielded over 60,000 customers. The Interliant Texas acquisition brought Sage Networks thousands of Notes-enabled applications. Distribution of revenue for Interliant was as follows for 2000:

    14% from Web hosting offerings

    54% from ASP professional services

    32%% from application hosting

Interliant continues to rely on three data centers, located in Houston; Atlanta; and Vienna, Virginia. Each center is capable of handling co-located servers. Houston continues to be the largest and most sophisticated, with Vienna being a secondary data center online since late summer of 1999. A total of $2 million was invested in the Houston facility. Interliant has invested over $1.6 million in the Atlanta facility.

In interviews, the CEO for Interliant has mentioned his top priorities for the company:

  1. Build the Interliant brand.

  2. Continue aggressively pursuing an acquisition strategy.

  3. Develop multiple sales channels.

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