Rackspace's continues buying spree to boost services

By Brandon Butler, Network World |  Cloud Computing, Rackspace

" February 2012: Anso Labs, creators of Nova, the OpenStack compute project for building private clouds

" February 2012: SharePoint911, Microsoft SharePoint Consultancy

" August 2012: Mailgun, e-mail notification service for developers

Matthews, the Rackspace development officer, says the company looks for three major things when deciding to purchase a company: solid technology, entrepreneurial or engineering talent, and new market opportunities or expanded services. And Rackspace is on the lookout for more companies to buy, he notes. Particular areas of interest for future acquisitions include database management, security and cloud storage, he says.

Lydia Leong, a Gartner cloud analyst says Rackspace's M&A moves come down to a simple strategy: Rackspace wants to beef up its offerings for customers in as many areas as possible. Its recent acquisitions - SharePoint and Mailgun - add services on top of its current offerings that appeal to the enterprise market, building up an "API ecosystem," she says to enhance its cloud offerings.

Matthews says in addition to M&A the company works hard to internally develop. For example, as a lead on the OpenStack project after co-founding it with NASA in 2010, Rackspace has been one of the major contributors of the code to the project and has basically been its biggest cheerleader in the market. The Anso Labos acquisition supported those efforts by bringing on OpenStack coder expertise to the company.

Not all acquisitions go smoothly though. Shortly after Rackspace launched its OpenStack powered clouds a crew of developers Rackspace acquired from Anso left the company to work for another OpenStack company, Nebula. Matthews says the reality of the high-tech space is that talent can be hard to keep. "Our goal is to keep entrepreneurs as long as we possibly can," he says, adding that's not always possible though.

Acquiring and keeping talented engineers is an issue Rackspace, which is based in San Antonio, Texas, has struggled with throughout the life of the company as it has increased its prominence in the cloud marketplace, Walravens says. The cloud industry is fast-changing and with other big-name players such as Google, Microsoft and Amazon all fighting for cloud engineers. Not being headquartered in Silicon Valley or Seattle could be making it harder for the company to acquire and keep talent, Walravens says. "M&A helps close that gap," he adds.


Originally published on Network World |  Click here to read the original story.
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