Rackspace buys rival cloud service provider Datapipe

The deal will help Rackspace expand its global footprint and Fortune 500 customer base.
Written by Natalie Gagliordi, Contributor

Rackspace has inked a deal to acquire rival managed public cloud service provider Datapipe as it looks to expand its global footprint and Fortune 500 customer base. Financial terms of the deal were not disclosed, but Rackspace claims it is the largest in its history.

Datapipe, based in Jersey City, N.J., has cloud infrastructure capabilities in Silicon Valley, the New York Metro area, London, Hong Kong, and Shanghai. Datapipe also opened a data center in Moscow under the pretense of helping enterprises operate and sell in the country while abiding by Russia's strict data sovereignty laws.

Rackspace listed a string of new capabilities and market benefits that it expects to gain from Datapipe. Boiled down, the most significant gains stem from Datapipe's presence among large companies, including the U.S. Departments of Defense, Energy, and Treasury, as well as the U.K. Cabinet Office, Ministry of Justice, and Department of Transport.

Datapipe also has data centers and offices in key markets where Rackspace has little to no footprint, including Brazil, China and Russia, as well as a managed services deal with the Alibaba Cloud.

Like most cloud-computing firms, Datapipe has used acquisitions to build out support for multiple cloud platforms, including AWS, Microsoft Azure, and its own hosted private cloud, Stratosphere. A year ago Datapipe bought AWS consulting partner Adapt, and prior to that the company acquired AWS assessment, automation, and migration company DualSpark. In 2013, Datapipe scooped up Newvem to expand its cloud analytics and operations optimization products.

As for Rackspace, the acquisition is the latest step in the company's efforts to expand beyond its core cloud management services. In April, the company launched its new Global Solutions and Services (GSS) division aimed at delivering professional services.

Rackspace started shifting toward customer support services last year after it struggled to compete against major cloud providers like Amazon, Google, and Microsoft, but it's now one of the top managed service providers for AWS. The company left the public market late last year following a $4.3 billion deal with the private equity firm Apollo Global Management.


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