News & Insights for the AI Journey|Monday, December 9, 2019
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TriCore Deal Boosts Rackspace’s Apps Offerings 

A day after naming a new CEO, managed cloud specialist Rackspace has moved to beef up its enterprise application delivery capabilities with the acquisition of an application, cloud and infrastructure hosting company.

San Antonio-based Rackspace said Thursday (May 25) its acquisition of TriCore Solutions is expected to close in June. Financial details of the transaction were not disclosed, but Rackspace did say the acquisition is the largest in its history.

TriCore, Norwell, Mass., specializes in delivering enterprise resource planning applications covering core functions such as financial operations, human resources, manufacturing and supply chain management, among others. It supports solutions from vendors such as Oracle (NYSE: ORCL) and SAP (NYSE: SAP).

The hosted segments of the $3 billion annual market for these enterprise services is expected to expand at double-digital growth rates, according to market statistics cited by Rackspace.

The TriCore acquisition would help Rackspace "move further up the stack" to expand its managed application offerings, Jeff Cotten, president and interim CEO of Rackspace, noted in a statement announcing the deal.

TriCore CEO Mark Clayman and the company's management team will join Rackspace as part of the acquisition.

TriCore's services are delivered to a customer's datacenter, one of its own datacenters, a colocation facility or public cloud vendors such as Amazon Web Services (NASDAQ: AMZN) Google Cloud Platform NASDAQ: GOOGL) or Microsoft Azure (NASDAQ: MSFT). TriCore has about 275 managed service customers, Rackspace said.

The company also has offices in Berwyn, Pa., Milwaukee and two locations in India.

The TriCore deal is the first by Rackspace since it went private last year when it was itself acquired by investment manager Apollo Global Management in a deal worth $4.3 billion. The cloud services giant had traded on the New York Stock Exchange beginning in 2008.

The deal help fill a gap in Rackspace's cloud services that allows it to managed critical enterprise applications such as Oracle's E-Business Suite.

The acquisition was announced one day after Rackspace announced the appointment of Joe Eazor as its new CEO. The appointment by Rackspace's board takes effect on June 12. Eazor previously served as CEO of Earthlink, transitioning the dial-up Internet service to cloud networking.

Rackspace helped pioneer the OpenStack cloud infrastructure platform. Prior to going private, it introduced a managed private cloud service last year targeting a range of datacenter deployments along with new OpenStack deployment software.

The intent was to allow more enterprises to run OpenStack private clouds in their datacenters without the operational hassles. The offering addressed complaints that OpenStack has so far proven difficult to implement.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).

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