Internap 10K - A few comments

A few random comments going through Internap 10Q.

For the first time, the Company is finally giving out details about the data center facilities directly managed (something they had always refused to do in the past):

I speculate that the Los Angeles data center is the old Vitalstream one, which is not in use right now (Internap moved the CDN point of presence from this downtown data center to El Segundo, which I believe is a 365 Main facility).

These are a few summarized infos about the three segments Internap is operating (some emphasis added):

IP SERVICES

• Although we experienced pricing pressure for our IP services, our revenue increased year-to-year due to an increase in demand for our services.
• Revenue for IP services increased $1.1 million, or 1%, to $123.3 million for the year ended December 31, 2008
• There was a net increase in IP services customers from December 31, 2007 to December 31, 2008, and these new customers added approximately $8.1 million of revenue during 2008.
• IP services revenue also includes FCP sales and other hardware sales of $4.8 million and $4.6 million for the years ended December 31, 2008 and 2007, respectively.

COLO:

• Data center services continue to be a source of revenue growth for our business, and we expect this trend to continue
• Revenues for data center services increased approximately $26.0 million, or 31%, to $109.7 million for the year ended December 31, 2008
• We experienced a net increase in customers in this segment as we structured our data center business to accommodate larger, global customers.
• We had a net increase of customers from December 31, 2007 to December 31, 2008 and new data center services customers added approximately $7.8 million of revenue during 2008.

CDN

• Although we experienced a net decrease in customers in our CDN segment, our revenue in that segment has increased. (MY NOTE: not an apple to apple comparation, as Internap did not record direct CDN revenues for 12 months in 2007, but only since February 20 - it would probably be imbarassing to add the 2007 Akamai CDN resale revenues and compare...)
• Revenues increased in our CDN segment, despite a net decrease in the number of our CDN customers, due to increased usage of our applications.
• CDN services revenues and operating results for the year ended December 31, 2008 were lower than projected, primarily due to: (1) integration and reliability issues in the acquired network, which we have resolved, (2) a strategic shift to larger, higher credit quality customers and (3) more recently, a highly-competitive market environment for CDN services that is driving our prices lower.

Here are the adjusted gross margins achieved per segment (note how CDN is decreasing):
click to enlarge