Advanced Computing in the Age of AI | Saturday, December 3, 2022

Rackspace Expands Cloud Services With Datapipe Deal 

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Responding to what it says is growing customer demand for overseeing multiple clouds at scale, managed services specialist Rackspace said it is acquiring cloud rival Datapipe.

While terms of the deal were not disclosed, Rackspace said Monday (Sept. 11) that it expects the acquisition to close during the fourth quarter of 2017, pending U.S. and overseas regulatory approvals that come into play since the companies are direct competitors. Both are privately held.

The deal gives San Antonio-based Rackspace an east coast and expanded international presence. Datapipe, Jersey City, N.J., operates 29 datacenters in nine countries, including Brazil, China and Russia along with U.S. west coast locations.

Along with several U.S. and U.K. government agencies, including the U.S. Defense Department, Datapipe also provides managed cloud services for Chinese e-commerce giant Alibaba Group (NYSE: BABA). It also provides datacenter colocation services on four continents.

Those far-flung managed services would be meshed with Rackspace's cloud services ranging from its formative development of OpenStack private clouds along with managed services for Microsoft Azure (NASDAQ: MSFT) and Google Cloud Platform (NASDAQ: GOOGL) along with recent offerings such as Azure Stack and VMware Cloud on Amazon Web Services (NASDAQ: AMZN).

Specific enterprise services offered by Rackspace include Oracle (NYSE: ORCL) and SAP (NYSE: SAP) databases.

"Our customers are looking for help as they spread their applications across public and private clouds, managed hosting, and colocation, depending on the blend of performance, agility, control, security, and cost-efficiency they’re seeking," Rackspace CEO Joe Eazor noted in a statement announcing the acquisition. The deal is Rackspace's largest ever acquisition, Eazor noted, adding that Datapipe would help it expand its multi-cloud management services portfolio as well as the company's global reach.

The acquisition would help Rackspace, which went private last year in a $4.3 billion deal by an investor group led by Apollo Global Management, target the growing number of companies adopting multi-cloud strategies as a way of avoiding vendor lock-in. It also strengthens the company's ability to attract customers using OpenStack and other private cloud platforms along with managed hosting and colocation services needed as more enterprise applications are moved out of corporate datacenters.

Alibaba Cloud tapped Datapipe last year as its primary managed service provider. Last week, health care data provider British Medical Journal announced that it had selected Datapipe to launch its hybrid multi-cloud platform as it enters the Chinese market using Alibaba Cloud.

Other large Datapipe customers include Johnson & Johnson, McDonald’s and Rubbermaid. Along with cloud certification under the U.S. Federal Risk and Authorization Program, or FedRAMP, Datapipe also gives the cloud services giant a foothold into several U.K. agencies.

In a blog post, Eazor asserted the transaction would make Rackspace the world's largest provider of managed hosting and private cloud services.

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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