Rackspace looks to dominate managed cloud services market after Datapipe acquisition

Rackspace looks to dominate managed cloud services market after Datapipe acquisition

According to TechCrunch, Rackspace has announced plans to acquire rival managed public cloud service company Datapipe.

Based in Jersey City, Datapipe has 825 employees who work at 11 offices in the US., UK., and Asia.

Datapipe will also see a few benefits, including better integrations with Microsoft, VMware and OpenStack private clouds, and new service offerings for Azure Stack and VMware Cloud on AWS. Many of these data centers are located in key markets where Rackspace has little or no presence today, including the West Coast of the U.S., Brazil, mainland China, and Russian Federation.

Traditional colocation services across four continents, to reduce cost and risk for customers moving applications out of their corporate data centers.

Datapipe's public sector customers include the UK's Cabinet Office, Ministry of Justice and Department of Transport, as well as the US' Departments of Defence, Energy and Treasury.

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. All the employee of Datapipe will join Rackspace, said company.

"The combination of complementary capabilities and resources from both of our companies will create the world's leading provider of multi-cloud managed services", said Robb Allen, founder and CEO of Datapipe, in a statement.

The San Antonio-based company said this latest acquisition is even larger than its recent agreement to acquire TriCore Solutions, and is expected to close in the fourth quarter pending regulatory approval by the Federal Trade Commission.

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

But "managing multiple clouds at scale" seems to be the sweet spot that Rackspace is after. Datapipe has been working in that managed public cloud world for twice as long.

Both Rackspace and Datapipe have been positioned as Leaders in the Gartner Magic Quadrant assessments of providers in the industry, and have also both been represented in rankings by Forrester and other analyst firms.

After the acquisition, for example, a Rackspace customer could have a solution that's 10 percent colocation for its legacy applications, and 90 percent other Rackspace services, Bradley said.

Rackspace also went private a year ago after Apollo Global Management and its investors acquired it for $4.3 billion. The company is also owned by private equity: Boston-based Abry Partners.

The company provides IT services to a range of vertical industries, which include the healthcare, financial sectors, pharmaceutical, manufacturing and distribution, publishing, communication, business services, public sector, government, and technology industry. It may not be clear until after that happens what will happen with Datapipe's strategic channel partnership with Equinix.

Barclays and DH Capital are acting as financial advisors in the transaction to Datapipe. Last year, it acquired United Kingdom -based cloud consulting firm Adapt to try to gain a foothold in the European market. 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.

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