Rackspace nears buyout; Going private could boost cloud managed services effort

Should Rackspace go private, it may have more leeway to invest in its support services for AWS and Microsoft Azure.

Rackspace is reportedly nearing a sale to a private equity firm.

According to The Wall Street Journal, Rackspace is nearing a buyout roughly two years after the cloud-computing company first said it would pursue strategic alternatives. Since looking for buyers, Rackspace named a new CEO, delivered a few solid quarters, and more importantly, shifted to offering support for multiple cloud providers including Amazon Web Services.

By focusing more on offering cloud-computing support, Rackspace's core strength, the company has apparently made itself more attractive.

The Wall Street Journal said that Rackspace may be valued as high as $4 billion. Rackspace is scheduled to report its second quarter earnings August 8, so an acquisition announcement is likely to land then or before the results are announced.

Also: AWS, Microsoft seen rated top dogs in IaaS in Gartner's Magic Quadrant | Public cloud computing vendors: A look at strengths, weaknesses, big picture | Google, Rackspace will co-design Power9 servers for Open Compute | Rackspace: Solid Q4, weak outlook and hopes to ride cloud computing support wave

Rackspace started the OpenStack cloud movement, but it has struggled to keep up with the frenetic market for Infrastructure-as-a-Service.

Should Rackspace go private, it may have more leeway to invest in its support services for AWS and Microsoft Azure. Rackspace's "fanatical support" could resonate for enterprises looking to better manage cloud infrastructure.

On Rackspace's first quarter earnings call, the company highlighted traction in AWS and Azure services.

rax-aws-support-q1.jpg
azure-rax-support.jpg