8×8, which sells IP-based business communications equipment and platforms, said it bought managed hosted services and cloud-computing firm Central Host Inc. on May 1. 8×8 paid $1 million in cash – equal to a year’s worth of Central Host revenue – and issued 432,276 shares of its common stock to Central Host founder Andrew Schwabecher. The shares weren’t registered for sale. Schwabecher may sell up to 50 percent of those shares before May 1, 2011, and may sell the rest if he is still employed by 8×8 as of May 1, 2012. But if he leaves 8×8 within two years, he can’t sell the remaining shares until May 1, 2013, 8×8 said in a filing with the Securities and Exchange Commission.
California-based 8×8 said it purchased Central Host for its managed hosting and cloud expertise. Like 8×8, Central Host has specialized in the business market, working to help client cut in-house equipment and personnel costs. Central Host operates three data centers in Silicon Valley and another in New York City.
“Adding managed hosting and cloud computing services to our business service offerings is an ideal extension of our current business,” said Bryan Martin, chairman and CEO of 8×8 Inc. “We are excited to provide additional enterprise-class services to our customer base, giving us multiple best-of-breed offerings to sell to the same installed base.
“Central Host’s customers are ideal targets for 8×8’s communications services, and we believe that many of 8×8’s existing customers will benefit from the performance attributes and disruptive pricing of the Central Host offerings,” 8×8 Chairman and CEO Bryan Martin said in a prepared statement.
Central Host has moved into 8×8’s Sunnyvale headquarters.