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Dediserve acquired by Iomart Group plc
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Dediserve acquired by Iomart Group plc

https://www.thetimes.co.uk/edition/ireland/dediserve-duo-on-cloud-nine-with-scottish-deal-hqgch05x3

Dediserve, a Dublin company specialising in cloud computer services, has been bought for €7.9m cash by Iomart Group, a Scottish IT provider that is listed on the junior market in London.

The deal is a windfall for Dediserve director Stephen McCarron, who owned 70% of the business, and managing director Aidan McCarron, who had 30%. Stephen McCarron previously set up Hosting365, which was bought by US firm SunGard in 2010.

Iomart, which is valued at £330m (€375m) on the Alternative Investment Market, said: “There are no plans for change [at Dediserve] other than continued investment and growth in the company and the team.”

Dediserve provides cloud hosting in 10 locations around the world and has more than 1,500 customers. The company made nearly €300,000 profit…

Congrats to @dediserve ;)

«1

Comments

  • On mobile, it shows €7 before breaking to a new line. I was like... wtf?

    Comes out I'm just missing some sleep

    Thanked by 2dediserve netomx
  • The company made nearly €300,000 profit…

    Like, in total or per year?

    7.900.000€ ...whew, not bad. Congratz :o

    Thanked by 1dediserve
  • dediservedediserve Member, Provider

    Thanks guys.

    Thanked by 2Yura Ympker
  • FaiziFaizi Member

    @dediserve said:
    Thanks guys.

    So what's your next project?

  • dediservedediserve Member, Provider

    @Faizi said:

    @dediserve said:
    Thanks guys.

    So what's your next project?

    Business as usual. The additional reach and scale Iomart brings is hugely exciting. We've great plans on new services, hybrids, dedicated cloud servers and new locations!

  • @dediserve, any pricing changes expected for current customers?

    Thanked by 1vimalware

    Cheap VPS - VPSDime

  • TomTom Member

    Congrats @dediserve!

  • dediservedediserve Member, Provider

    @serverian said:
    @dediserve, any pricing changes expected for current customers?

    Not a thing. Business as usual.

  • @dediserve You are staying with the company right?

  • dediservedediserve Member, Provider

    @TheOnlyDK said:
    @dediserve You are staying with the company right?

    No change :)

    Thanked by 2TheOnlyDK vimalware
  • MikePTMikePT Member, Provider

    @dediserve said:

    @TheOnlyDK said:
    @dediserve You are staying with the company right?

    No change :)

    Congratulations. Looks like you done it right. :)

  • AnthonySmithAnthonySmith Top Provider
    edited July 2017

    Wow, nice one.

    image

    Just don't allow any iomart support staff to communicate with the current customer set in any way shape or form and you will have many happy years ahead :)

    I am no longer active here, find me at https://talk.lowendspirit.com (Just like LET without the scams)

  • InfinityInfinity Member, Provider

    @dediserve said:
    Business as usual. The additional reach and scale Iomart brings is hugely exciting. We've great plans on new services, hybrids, dedicated cloud servers and new locations!

    I'm not sure that's how an iomart takeover usually works out - it's more like they'll migrate to their existing locations eventually and phase out any others. I've been a long term customer of a company which was taken over by iomart, the service it self is not bad, but there's no chance they'll leave Dediserve running as it is for very long.

    Most of the staff from that brand ended up leaving shortly after the takeover citing the company culture etc.

    Cablestreet - London based ISP - Managed Solutions, Carrier Services, Colocation, Dedicated Servers, VMs, and more..

  • dediservedediserve Member, Provider

    Nothing is changing at dediserve. Same team same support team same locations. Just more of what works :) you can't fix what's not broke :)

    Thanked by 1dwtbf
  • randvegetarandvegeta Member, Provider

    7.9M for only 300k /yr in profit? that would take more than 25 years to repay. How much capital did you include?

    Thanked by 1leapswitch
  • DigitalFyreDigitalFyre Member, Provider

    randvegeta said: 7.9M for only 300k /yr in profit? that would take more than 25 years to repay. How much capital did you include?

    The profit is not the only thing that counts here. There's millions worth of hardware too :P

  • jvnadrjvnadr Member

    randvegeta said: 7.9M for only 300k /yr in profit? that would take more than 25 years to repay. How much capital did you include?

    In such cases, profit logistically is what a company earns after the margin that has been set for expenses and depreciation of equipment purchase. So, if a company has bought 2M$ of equipment and the plan is to include as payment for this equipment (loans, investors) in 10 years with some interest, let's say 10%, then expenses are 2,2M$ / 10 years, 220K$ per year. If the other expenses (salaries, electricity etc.) are, let's say, 200K$ per year, then, the yearly cost of operation of the company will be 420K$ per year. If the income is 600K$/year, the yearly profit is 180K$ but the worth if the company is not that: it is the income for several years, the owned gear, the economic forecasts, profit forecasts and the margin for further development.

    Thanked by 1netomx
  • WilliamWilliam Member, Provider

    dediserve said: you can't fix what's not broke :)

    I see you do not know the IOMart history. They can and try to fix perfectly working things, gloriously fail and then just continue like nothing....

    DigitalFyre said: There's millions worth of hardware too :P

    A company with 1500 VM customers does not have millions worth in hardware; the entire dediserve IP space is not enough to address millions worth of hardware alone...

  • jvnadrjvnadr Member
    edited July 2017

    William said: A company with 1500 VM customers does not have millions worth in hardware; the entire dediserve IP space is not enough to address millions worth of hardware alone...

    In this case, probably is not the hardware that raised the price. It has to be the platform itself, the growth per year and per month, any innovation to the cloud field (how to deploy vms, gui friendly for developers etc.), investments that has been given to dediserve, forecasts and, of course, the bought equipment and the setup cost (human resources for it etc.).
    IOMart people are not dumb to spend this kind of money if all that were there is 1500 clients of vps...

  • Newsletter in code format hurt my eyes!

    Make it work, make it right, make it fast.

  • randvegetarandvegeta Member, Provider

    @jvnadr said:

    William said: A company with 1500 VM customers does not have millions worth in hardware; the entire dediserve IP space is not enough to address millions worth of hardware alone...

    In this case, probably is not the hardware that raised the price. It has to be the platform itself, the growth per year and per month, any innovation to the cloud field (how to deploy vms, gui friendly for developers etc.), investments that has been given to dediserve, forecasts and, of course, the bought equipment and the setup cost (human resources for it etc.).
    IOMart people are not dumb to spend this kind of money if all that were there is 1500 clients of vps...

    300k / yr is not alot by any means. So for a valuation of 26x annual earnings it's got to be capital (be it hardware, property or tech). But 7.9M is no small sum. Hard to imagine that Dediserv have 7.9M worth of Cloud Tech.. That kindof money can hire a decent team of developers.

  • WilliamWilliam Member, Provider

    300k profit, which could be turnover of, well, 300k to infinity - x26 is high, x10-x12 is more standard at least from both what i sold and what i've seen offered and accepted at (former) jobs.

    randvegeta said: But 7.9M is no small sum

    For tech acquiral it is actually, just look at the prices non-profitable startups sell in US or even EU....

  • jvnadrjvnadr Member
    edited July 2017

    randvegeta said: 300k / yr is not alot by any means

    The opposite. It is a big profit, most of new companies will continue in loss for many years in their annual balance sheet, until they gain their first profits.
    Don't confuse logistic profits with what an employee or an one-man-show company do think as profit/income/expenses with that financial specs of a real company are.
    So, 300K for the year, is more than enough for a startup and a positive balance for any company (DO is still working at loss, but with great margins of evolve and growth that give a huge stock market and investing value).

    Thanked by 1netomx
  • randvegetarandvegeta Member, Provider

    @William said:
    300k profit, which could be turnover of, well, 300k to infinity - x26 is high, x10-x12 is more standard at least from both what i sold and what i've seen offered and accepted at (former) jobs.

    randvegeta said: But 7.9M is no small sum

    For tech acquiral it is actually, just look at the prices non-profitable startups sell in US or even EU....

    If someone offered me 10x my turnover, ide probably accept. And I have property in HK.. which is expensive as hell!

  • YuraYura Member

    Can't login!

    Someone changed phpMyAdmin password again...

    Thanked by 1Junkless
  • OnApp_TerryOnApp_Terry Member, Provider
    edited July 2017

    @jvnadr said:

    randvegeta said: 300k / yr is not alot by any means

    The opposite. It is a big profit, most of new companies will continue in loss for many years in their annual balance sheet, until they gain their first profits.
    Don't confuse logistic profits with what an employee or an one-man-show company do think as profit/income/expenses with that financial specs of a real company are.
    So, 300K for the year, is more than enough for a startup and a positive balance for any company (DO is still working at loss, but with great margins of evolve and growth that give a huge stock market and investing value).

    +1 - this is why EBITDA is a better metric when doing acquisitions.

    Congrats @dediserve :)

    Thanked by 1dediserve

    OnApp + CDN.net
    [email protected]

  • randvegetarandvegeta Member, Provider

    @jvnadr said:

    randvegeta said: 300k / yr is not alot by any means

    The opposite. It is a big profit, most of new companies will continue in loss for many years in their annual balance sheet, until they gain their first profits.
    Don't confuse logistic profits with what an employee or an one-man-show company do think as profit/income/expenses with that financial specs of a real company are.
    So, 300K for the year, is more than enough for a startup and a positive balance for any company (DO is still working at loss, but with great margins of evolve and growth that give a huge stock market and investing value).

    Well of course without knowing the full picture, it is difficult to know where the valuation comes from. But generally speaking, 300k profit is not much. Perhaps turnover is massive and and the profit is even irrelevant. But I cannot agree that it is 'huge'. Relatively speaking, it is tiny ( if not irrelevant ).

  • WHTWHT Member

    From LET to 7.3 million, well done!

    Thanked by 1netomx
  • WilliamWilliam Member, Provider

    jvnadr said: Don't confuse logistic profits with what an employee or an one-man-show company do think as profit/income/expenses with that financial specs of a real company are.

    Keep in mind that Dediserve was/is a simple LTD with only a few people as well though, not a major corp with own financial+legal dept.

  • jvnadrjvnadr Member

    William said: Keep in mind that Dediserve was/is a simple LTD with only a few people as well though, not a major corp with own financial+legal dept.

    I am sure that accountants studied the finance part. It is impossible for us to know the real economic picture of a company, so, for such a big acquisition there are a lot of things we will never know about.
    BTW, what I wrote before is a general default for company world that can maybe explain the dediserve deal and declares the difference of what a company worth compared to the yearly profits.

  • LeeLee Member

    WHT said: From LET to 7.3 million, well done!

    Not quite, LET won't contribute significantly to their profit.

    Thanked by 1dediserve
  • I ve been using dediserve for more than 1 year and they are providing constantly stable service.

    congratz on the selling for €7.9m cash.

    lets hope to see more reliable services from dediserve

    Thanked by 1dediserve
  • hanoihanoi Member
    edited July 2017

    Hope you will not be SliceHost version 2

    In my memories, IOMart seem good in UK.

    Farewell Dediserve.

    Thanked by 1dediserve
  • vmhausvmhaus Provider, Top Provider
    edited July 2017

    @hanoi said:
    Hope you will not be SliceHost version 2

    In my memories, IOMart seem good in UK.

    Farewell Dediserve.

    For those who wonder about SliceHost

    http://37signals.com/founderstories/slicehost

    VMHaus - High Performance SSD SSD Cloud Servers

  • Good going dediserve team.

    Hope the specials don't get yanked from customers.

    Thanked by 1dediserve

    USA storage KVM €25/yr 1G, 500GB (RAID6)
    (affiliate for 🥰 ) https://clients.inceptionhosting.com/aff.php?aff=401&pid=205

  • dediservedediserve Member, Provider
    edited July 2017

    For what it's worth the 1500 vm customer figure is very wrong :) and the millions of hardware we have is actually a matter of public record in our accounts filings each year :)

    Thanked by 1Junkless
  • dediservedediserve Member, Provider

    And the quoted profit figure is from FY 2015 :)

    Thanked by 2Junkless netomx
  • randvegetarandvegeta Member, Provider

    dediserve said: And the quoted profit figure is from FY 2015 :)

    The numbers quoted would need to be way way way off in order to justify the price. That or you have something else of much greater value. Which again goes back to tech (Intellectual Property?).

    Congrats on your success regardless. But if the valuation is based on your profit/turnover, then heck my company may be worth more than I thought :D.

    Thanked by 1dediserve
  • joepie91joepie91 Member, Provider

    Also don't forget that the value isn't just in the money invested into the company; it's also in the risks that have already been weathered.

    It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised. By acquiring a company with functioning custom software, you're essentially sidestepping the "but what if it ends up being crap" scenario (because you know it isn't), and that's worth something as well.

  • FranciscoFrancisco Top Provider

    joepie91 said: It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised.

    They use OnApp.

    Francisco

    BuyVM - Free DirectAdmin, Softaculous, & Blesta! / Anycast Support! / Windows 2008, 2012, & 2016! / Unmetered Bandwidth!
    BuyShared - Shared & Reseller Hosting / cPanel + Softaculous + CloudLinux / Pure SSD! / Free Dedicated IP Address
  • ClouviderClouvider Member, Provider
    edited July 2017

    @Francisco said:

    joepie91 said: It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised.

    They use OnApp.

    Francisco

    I don't think it was to be taken literally.

    Same scenario can apply to any business.

    Edit; and OnApp is great, we use it too ;-).

    Clouvider Limited - Leading Hosting & Connectivity Partner || Dedicated Server Sale from £39/m - Our Latest LET Offer

    Cloud Web Hosting | SSD & SAS HA OnApp VPS | US, UK, NL & DE Dedicated Servers | Network Services | Colocation | Managed Services

  • joepie91joepie91 Member, Provider
    edited July 2017

    @Francisco said:

    joepie91 said: It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised.

    They use OnApp.

    Francisco

    They may very well, it was just a specific example of how there can be (invisible) value in already-weathered risks :) I haven't used Dediserve, so I have no idea whether they in particular use custom software. It'll apply to other aspects of the business as well.

  • @Francisco said:

    joepie91 said: It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised.

    They use OnApp.

    Francisco

    I was waiting silently to see who was gonna go ahead and say it.

    Thanked by 2netomx 17brownj

    Cheap VPS - VPSDime

  • FranciscoFrancisco Top Provider

    @serverian said:

    @Francisco said:

    joepie91 said: It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised.

    They use OnApp.

    Francisco

    I was waiting silently to see who was gonna go ahead and say it.

    You can always rely on me being a loudmouth.

    Francisco

    Thanked by 2netomx 17brownj
    BuyVM - Free DirectAdmin, Softaculous, & Blesta! / Anycast Support! / Windows 2008, 2012, & 2016! / Unmetered Bandwidth!
    BuyShared - Shared & Reseller Hosting / cPanel + Softaculous + CloudLinux / Pure SSD! / Free Dedicated IP Address
  • ClouviderClouvider Member, Provider

    @Francisco said:

    @serverian said:

    @Francisco said:

    joepie91 said: It's one thing to hire a bunch of developers to build you a panel, for example, but a whole other thing to have an actually well-functioning panel that works as promised.

    They use OnApp.

    Francisco

    I was waiting silently to see who was gonna go ahead and say it.

    You can always rely on me being a loudmouth.

    Francisco

    I still don't understand what's the problem with it.

    Clouvider Limited - Leading Hosting & Connectivity Partner || Dedicated Server Sale from £39/m - Our Latest LET Offer

    Cloud Web Hosting | SSD & SAS HA OnApp VPS | US, UK, NL & DE Dedicated Servers | Network Services | Colocation | Managed Services

  • FranciscoFrancisco Top Provider

    @Clouvider said:

    I still don't understand what's the problem with it.

    It took Onapp the better part of a year of pain/suffering before their storage worked 'ok'. There's some long winded threads from the seflow guy on WHT documenting all of it and it was nothing but a laughable mess of them not addressing issues.

    Right now they're likely in 'dont fuck with it' mode, but at some point they'll want to add a new big feature and the potential of a gongshow is high.

    Francisco

    BuyVM - Free DirectAdmin, Softaculous, & Blesta! / Anycast Support! / Windows 2008, 2012, & 2016! / Unmetered Bandwidth!
    BuyShared - Shared & Reseller Hosting / cPanel + Softaculous + CloudLinux / Pure SSD! / Free Dedicated IP Address
  • ClouviderClouvider Member, Provider
    edited July 2017

    @Francisco said:

    @Clouvider said:

    I still don't understand what's the problem with it.

    It took Onapp the better part of a year of pain/suffering before their storage worked 'ok'. There's some long winded threads from the seflow guy on WHT documenting all of it and it was nothing but a laughable mess of them not addressing issues.

    Right now they're likely in 'dont fuck with it' mode, but at some point they'll want to add a new big feature and the potential of a gongshow is high.

    Francisco

    They add new big features.

    No one asked the guy in WHT to run it untested. You don't run into production without testing infra even if you buy it done for you. We had similar (some) issues and we made sure they were resolved before we went even close to production stage.

    Clouvider Limited - Leading Hosting & Connectivity Partner || Dedicated Server Sale from £39/m - Our Latest LET Offer

    Cloud Web Hosting | SSD & SAS HA OnApp VPS | US, UK, NL & DE Dedicated Servers | Network Services | Colocation | Managed Services

  • matteobmatteob Member, Host Rep

    @Clouvider said:

    No one asked the guy in WHT to run it untested. You don't run into production without testing infra even if you buy it done for you. We had similar (some) issues and we made sure they were resolved before we went even close to production stage.

    But not all bugs can be discovered under lab infrastructure. An example? On high load random vdisks begun unusable (running vm still running, but no way to reboot them until you reboot the storage controller) with error "unable to activate all paths". We took 3 tickets + ditlev enquiry + full issue report to see onapp saying "I.S. is complex and we know that under high load we see that error...". They finally fixed on 5.4 version that is now running from 3 weeks without any issue.

    This is just an example on how is not always possible find bugs in lab infrastructure.

    p.s. OnAPP on v5.4 is working great without any critical know bugs.

    Thanked by 1vimalware

    Matteo Berlonghi - SeFlow s.n.c.
    SeFlow.Net - Affordable DDoS Protected Services. SeFlow Secure Network 20+ IXP connected with Default DDoS Protection.

  • DigitalFyreDigitalFyre Member, Provider

    matteob said: p.s. OnAPP on v5.4 is working great without any critical know bugs.

    Do 5.3 API Calls (Network and else) work on 5.4?

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