Rackspace Acquires Datapipe to Scale Cloud Management

The two reasons most often cited for deployed application workloads on a public cloud are cost and agility. In many cases, it’s less expensive to deploy certain classes of workloads on a cloud. It’s also a lot easier to update those applications as business conditions change. But arguably the most important downstream benefit is going to be the ability to deploy a lot more applications. With that latter issue in mind, Rackspace this week announced it is acquiring Datapipe, a rival provider of managed IT services and co-location facilities.

Rackspace CTO John Engates says the primary driver of the acquisition is a desire to achieve greater scale.

“Scale matters in the cloud,” says Engates.

As more application workloads move into the cloud, Engates says organizations are distributing those workloads on multiple public clouds across various geographic regions. As that process continues to occur, more of those organizations are going to rely on external third-party expertise to manage them, says Engates.

Today, anywhere between 15 to 20 percent of application workloads are managed by a third party such as Rackspace. As more IT organizations decide to focus more of their efforts on building applications versus deploying and managing them, that number could go a lot higher.

In addition to being able to manage a larger number of cloud at scale, Engates notes that Datapipe will bring with it intellectual property in form of software, including software for optimizing deployment of containers such as Docker and integrations with the help desk cloud service provided by ServiceNow. Engates says Rackspace has not yet decided what to do with that software, but he expects to incorporate it into the larger Rackspace managed services portfolio.

Competition among managed service providers (MSPs) is already fierce. IT leaders should expect to see a wave of continuing consolidation as MSPs attempt to achieve scale by both organic growth and acquisitions. The decision as to whether to rely more on those MSPs, however, will be as much about the cultural of an IT organization as it is the actual services being provided.