Rackspace, M&A, CEO and ongoing trends
It was a busy week despite the slowdown in the US with the Memorial Day long weekend.
Rackspace was at the centre of the sector’s developments. It announced a new CEO and then reached an agreement to acquire Boston-area managed hoster and MSP TriCore. The deal reflects Rackspace’s continuing transformation and the widening scope of its capabilities. It also speaks to the continued move of third party enterprise applications to a cloud-based service delivery model.
Both the strategic side and the enterprise application world was busy. Regarding the latter, we saw CenturyLink expand its SAP capabilities, while Oracle shared some data points around security add-ons for its application services. With respect to the former, we saw Deloitte acquire another AWS consulting shop, this time in the Asia-pacific, RapidScale purchased hosting assets formerly belonging to Vonage, Fastly raised $50m and MacStadium took on a growth equity partner.
The strategic activity reflects some of the larger trends in motion across the sector: namely the continued emergence of the managed third party cloud model and continued specialization, vertical focus and alignment with third party applications and platforms among younger service providers. There also continues to be divestitures of hosting-based assets and customer bases as organizations prioritize and evaluate a market that is increasingly about massive-scale or focused specialization and complexity. The middle ground continues to be less populated.
There were also a number of big cloud deals involving the likes of IBM and Microsoft Azure. Meanwhile, earnings season continues and this past week we took a look at the results coming from United Internet and CyrusOne.
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