Rackspace Enters Amazon’s Space

    October 23, 2008
    WebProNews Staff

Hosting company Rackspace made an aggressive move into cloud computing this week by acquiring Jungle Disk and Slicehost, and by securing relationships with Limelight Networks and Sonian Networks. The move puts Rackspace square into Amazon territory, sparking hopes that increased competition will lower costs.

Cloud computing has gotten a lot of buzz lately, especially as behemoth companies like Google and Microsoft wade out into the possibilities. The budding industry certainly seems the next logical step for forward-thinking hosting companies.

“Cloud computing offers tremendous benefits to our customers that complement our traditional managed hosting services,” said Lanham Napier, CEO, Rackspace Hosting.

“Being a leader in hosting means being a leader in the cloud. Today, we made clear our intent to have the best suite of cloud offerings. Our new offerings are part of a strategy to bring cloud benefits to all businesses with simple, cost-effective products that everyone can use, backed by the best customer support that only Rackspace can deliver.”

Slicehost specializes in Xen-based virtual machine hosting, while Jungle Disk’s expertise is in cloud storage. Rackspace says both companies’ capabilities will be integrated into the company’s overall strategy of offering a more robust hosting portfolio.

“On-demand computing is the new foundation of hosting,” said Jason Seats, founder, Slicehost. “Rackspace gives us the ability to expand the Slicehost offer and meet the needs of the corporate world whose interest in cloud technologies has only just begun.

Rackspace shelled out $11.5 million in cash and stock for both companies with performance-incentives equaling up to $16.5 million.