Black Lotus Acquires Managed Hosting Division of Listed 8×8, Inc.

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UPDATE –DDoS Mitigation Pioneer Black Lotus has bought the managed hosting division of 8×8, Inc., a listed company (NASDAQ:EGHT) delivering cloud communications services that include hosted PBX telephony, unified communications, call center software and video conferencing solutions.

With the acquisition, Black Lotus has gained two new points of presence (PoPs) at Santa Clara, CA and Ashburn, VA. The management plans to continue operating these sites and to extend the Black Lotus network nationwide. Terms of the deal were not disclosed.

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Jeffrey Lyon, founder Black Lotus: “We will grow our team, and our diversity of knowledge”

“In doing so we will bring best in breed network infrastructure, additional capacity, and optional distributed denial of service (DDoS) attack protection,” said  Black Lotus founder Jeffrey Lyon in his blog posting. “Additionally, we will grow our team, diversity of knowledge, and enhance our ability to serve you quickly and effectively.”

Black Lotus pioneered the first commercially viable DDoS mitigation system in 1999, just a few weeks after the first known DDoS attacks. Today Black Lotus offers a range of DDoS mitigation and DDoS-protected hosting services, including cloud servers and bare metal servers powered by the OnApp Cloud platform.

UPDATE – 8×8 today officially announced it has sold its dedicated server hosting business to The IRC Company, Inc. (dba Black Lotus Communications) for $3 million in cash. The transaction was signed and closed on September 30, 2013. The dedicated server hosting business, acquired by 8×8 in May 2010, provided managed hosting services on dedicated servers to 288 customers as of June 30, 2013.

For the fiscal year ended March 31, 2013, this business generated revenue of approximately $3.8 million and $753,000 in the first quarter of fiscal 2014. 8×8’s Infrastructure as a Service (IaaS) and Desktop as a Service (DaaS) cloud hosting business is not included in this transaction. The company will report a gain of approximately $1 million related to this transaction in the second quarter of fiscal 2014.

“The sale of our dedicated server hosting business enables 8×8 to sharpen its focus on the continued innovation and adoption of our core, cloud-based business service offerings,” said 8×8 CEO Vik Verma. “At the same time, this strategic transaction will have a positive effect on our gross margins and growth rates”