CHANGE IN ORGANIZATIONAL STRUCTURE AND REALIGNMENT OF EXPENSES

3 Months Ended

Mar. 31, 2016

Change In Organizational Structure And Realignment Of Expenses [Abstract]

CHANGE IN ORGANIZATIONAL STRUCTURE AND REALIGNMENT OF EXPENSES

2. CHANGE IN ORGANIZATIONAL STRUCTURE AND REALIGNMENT OF EXPENSES

During the three months ended March 31, 2016, we changed our organizational structure in an effort to create more effective and efficient operations and to improve customer and product focus. In that regard, our chief executive officer, who is also our chief operating decision maker (“CODM”), revised the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, beginning January 1, 2016, we report our financial performance based on our new segments, described in note 8 “Operating segments.” We have reclassified prior period amounts to conform to the current presentation.

In addition, in conjunction with the change in our organizational structure, we reclassified certain costs included in the expense categories on our consolidated statement of operations, which resulted in the following: a reclassification of “Sales and marketing” and “General and administrative” to “Sales, general and administrative” and “Direct costs of amortization of acquired and developed technologies” to “Depreciation and amortization” included on our accompanying consolidated statements of operations. We have reclassified prior period amounts to conform to the current presentation.

The prior year reclassifications, which did not affect total revenues, total direct costs of sales and services, operating loss or net loss, are summarized as follows (in thousands):

	Three Months Ended March 31, 2015
	As Previously Reported		Reclassification			As Reported
Revenues:
Data center services	$	59,098	$	(59,098	)	$	—
IP services		21,688		(21,688	)		—
Data center and network services		—		54,068			54,068
Cloud and hosting services		—		26,718			26,718
Direct costs of sales and services, exclusive of depreciation and amortization:
Data center services		24,264		(24,264	)		—
IP services		9,082		(9,082	)		—
Data center and network services		—		26,481			26,481
Cloud and hosting services		—		6,865			6,865
Direct costs of amortization of acquired and developed technologies		1,150		(1,150	)		—
Sales and marketing		10,283		(10,283	)		—
General and administrative		11,685		(11,685	)		—
Sales, general and administrative (“SGA”)		—		21,968			21,968
Depreciation and amortization		19,058		1,150			20,208

SGA expense consists primarily of costs related to sales and marketing, compensation and other expense for executive, finance, product development, human resources and administrative personnel, professional fees and other general corporate costs.