Rackspace Hosting may be sold.
The San Antonio-based company hired Morgan Stanley to evaluate potential partnerships and acquisitions.
“In recent months, Rackspace has been approached by multiple parties who have expressed interest in exploring a strategic relationship with Rackspace, ranging from partnership to acquisition,” according to a statement filed with the Securities and Exchange Commission last week.
“Our board decided to hire Morgan Stanley to evaluate the inbound strategic proposals and to explore other alternatives which could advance Rackspace’s long-term strategy,” Rackspace wrote. “No decision has been made and there can be no assurance that the Board’s review process will result in any partnership or transaction being entered into or consummated.”
Rackspace, which provides web hosting and open cloud services, reported it did not intend to comment on the situation until its board approves a specific partnership or transaction. The company has faced increasing competition from giants Google and Amazon, which provide cloud hosting services.
In February, Lanham Napier, 43, retired as Rackspace’s chief executive officer. He had led the company since 2000 from a small startup to a large publicly traded company with more than 5,000 employees worldwide and more than $1.5 billion in revenue.
A year earlier, Lew Moorman, Rackspace’s president, left the company because of health issues with a family member.
Since February, Graham Weston, Rackspace’s chairman and co-founder, has served as its CEO.
Rackspace, founded in 1998, is the largest technology company in San Antonio with more than 3,000 employees occupying the old Windsor Park Mall in Northeast San Antonio. It also has an office in Austin and has international offices in London and Hong Kong.
Rackspace’s stock, traded under the symbol RAX on the New York Stock Exchange, soared on the news of the possible sale last week. Rackspace’s stock closed at $36.12 on Friday, up nearly 18 percent. The company’s stock traded as low as $26 and as high as $54 in the last 52 weeks. The stock traded as high as $81 per share in January of 2013, according to Forbes.
Tag: cloud services
All of Rackspace’s customers will be hybrid cloud customers in the future, said Gerardo Dada, the company’s product marketing leader.
San Antonio-based Rackspace, which calls itself the Open Cloud company and co-founded with NASA the Open Stack operating system, has seen its cloud computing business skyrocket in the past few years.
The cloud lets customers operate a “network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.”
Rackspace faces competition in the hybrid cloud market from Amazon Web Services, the number one leader, and other players such as Microsoft, HP Cloud and IBM’s SoftLayer.
Right now, customers can choose from public, private and hybrid clouds.
But a study just published this week from Gartner, a research firm, predicts that most big businesses will have hybrid cloud deployments by 2017.
“Virtualization reduced capital expenses, and standards and automation reduce operational expenses,” Thomas Bittman, vice president and analyst at Gartner, said in a news release. “However, taking the next step of adding usage metrics, self-service offerings and automated provisioning requires investment in technologies without a significant reduction in operational cost. With this in mind, the driving factor for going that next step should primarily be agility.”
Most companies are already using hybrid to an extent, Dada said. They already recognize they’re different types of cloud environments, he said.
“The question is not when hybrid but how,” he said.
Hybrid clouds, the combination of publicly and privately hosted servers and dedicated servers working together, can increase efficiency and save money, Dada said.
For example, many companies do not need exchange servers to host their own email, he said.
“They’re never going to be as good as a specialist,” Dada said.
Companies need to ask themselves what are the right technology applications to be publicly hosted and privately hosted, Dada said. There is not a single answer.
Rackspace recently started hosting Hubspot, a marketing service for small to medium-sized businesses, on a hybrid cloud from a private cloud setting. The company has realized a four times increase in efficiency with the public cloud at half the cost, Dada said.
“Chief Information Officers like public cloud servers because they are built around the “compute as a utility” model, where costs are generally low and users pay by the hour,” according to Rackspace. “But using public infrastructure means you may need to share resources with other tenants and you may lose some of the performance benefits that the private and hybrid clouds offer.”
There’s been so much buzz about the public cloud, Dada said.
“The cloud is powerful and transformational but it has its place,” he said.
The hybrid cloud offers more security than a pure public cloud, Dada said. And it gives companies a path to grow and expand in the future, he said.
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