Published: Tue, September 12, 2017
Markets | By Noel Gibbs

Cloud Computing: Rackspace makes its biggest deal ever, acquires a cloud startup

Cloud Computing: Rackspace makes its biggest deal ever, acquires a cloud startup

And while Datapipe will fill some geographic maps in Rackspace's data center coverage, it also introduces some overlap.

The cloud-computing firm has acquired Datapipe, a privately held company that manages servers and public and private cloud-computing systems for customers globally, much like Rackspace.

Although no figures for the deal have been released, it is thought to be the largest Rackspace has signed, and once it closes, the managed cloud provider will count USA multinational Johnson & Johnson and McDonald's among its new customers.

New Jersey-based Datapipe has 29 data centers in nine countries and 825 employees who work in 11 offices in the U.S., U.K., and Asia. Datapipe customers will be able to benefit from Rackspace's Google-based services.

Those customers include a large number of large public-sector companies, but also the US departments of defense, energy and justice, in addition to the U.K.'s cabinet office, ministry of justice and department of transportation. Rackspace was named a leader in the 2017 Gartner Magic Quadrant for Public Cloud Infrastructure Managed Service Providers, Worldwide and has been honored by Fortune, Forbes, and others as one of the best companies to work for.

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Datapipe also has 29 data centers in nine countries, particularly in ones where Rackspace doesn't have a strong presence, for private cloud offerings, Rackspace CEO Joe Eazor wrote in a blog post. "With the acquisition of Datapipe, we're very pleased to expand the multi-cloud managed services we provide our customers, while also opening doors to new opportunities across the globe".

The acquisition is expected to close in the fourth quarter pending regulatory approvals. Company did not disclose the financial of the transactions.

"We are very proud of the business we have built and the innovations and successful customer outcomes we have been recognised for, and the future of Datapipe will be even brighter in combination with Rackspace", said Robb Allen, founder and CEO of Datapipe. It also brings traditional colocation services across four continents to serve customers moving applications out of their corporate data centers.

Remaining relevant in a competitive multi-cloud world is important for both companies - neither has the scale on their own to compete against the giants, so a tie-up would seem to make some sense and further purchases would appear likely.

The companies also have distinct services.

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Richard Dolan, Datapipe's senior vice president of marketing, told CRN it made sense for two companies that so often come up against each other in the market to join forces.

Managed services on the Alibaba Cloud (the largest in China).

Alibaba Cloud tapped Datapipe a year ago as its primary managed service provider.

As a private company since past year, Rackspace continues to transform. Rackspace will also get access to Datapipe's colocation services - a market it hasn't traditionally played in - and the company's professional services businesses. Rackspace engineers deliver specialized expertise, easy-to-use tools, and Fanatical Support® for leading technologies including AWS, Google, Microsoft, OpenStack, Oracle, SAP and VMware. Some of the services it provides include cloud monitoring, diagnostics, custom application management, remote infrastructure management, and enablement of software-as-a-service (SaaS) to the independent software vendor.

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