Economy

Rackspace buys rival cloud service provider Datapipe

Rackspace buys rival cloud service provider Datapipeā€

Founded in 2000, the company is based in Jersey City, New Jersey, with 825 employees and 29 data centers in nine countries. It will also bring traditional colocation services, professional services and managed services on the Alibaba Cloud.

"It will have a big impact on our ability to deliver the multi-cloud services that today's customers are demanding", Eazor said in a blog post on Monday.

"Customers need guidance using public cloud infrastructure from Alibaba Cloud, Amazon Web Services, Google Cloud Platform and Microsoft Azure".

The companies also have distinct services.

While the value of the deal remains undisclosed, Rackspace claims it is the largest in its history, and it brings "important new capabilities" to the managed cloud provider.

The Datapipe deal comes only months after Rackspace agreed to buy TriCore Solutions, an application management specialist that at the time was its largest acquisition to date. The lineup includes the U.S. Departments of Defense, Energy and Treasury along with several British agencies. In August 2016, Rackspace also launched its global solutions and services division to expand its core cloud business.

Among the new capabilities that Datapipe is expected to deliver to Rackspace are data centres and offices in key markets where Rackspace today has little or no presence today, including the West Coast of the US, Brazil, mainland China, and Russian Federation.

The deal is the largest acquisition Rackspace has ever made "by far", according to CEO Joe Eazor, and brings to it Datapipe's experience with high-profile public sector customers in the USA and United Kingdom, as well as enterprise services, software, and tooling, and colocation services on four continents, to help customers migrate away from corporate data centers.

The agreement is indeed a reversal of fortunes for Rackspace, which had struggled to grow a few years ago and had put itself up for sale in 2014. "The combination of complementary capabilities and resources from both of our companies will create the world's leading provider of multi-cloud managed services".

Rackspace also went private previous year after Apollo Global Management and its investors acquired it for $4.3 billion.

According to industry surveys, the vast majority of companies operate across three or more clouds today, and will do so for years to come. When the transaction closes, Rackspace will have more than 6,500 employees, almost 4,000 more than it had in 2009.

Engates expects some positions to move to San Antonio, but says it is hard to know before the deal closes in the fourth quarter, a required regulatory sign off from the Feds, and an integration has been fully explored. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner.

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report.



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