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Summary:

Hosting company, turned cloud computing operator Rackspace Hosting said today it will buy startups Slicehost and Jungle Disk to boost its Mosso cloud offerings, and step up its competition with Amazon’s Web Services.

Rackspace Hosting said today that it has agreed to buy startups Slicehost and Jungle Disk, a move aimed at boosting its Mosso cloud offerings in order to step up competition with Amazon’s Web Services. But whether or not Rackspace can successfully transition from being a hosting provider to a provider of a truly on-demand cloud offering remains to be seen.

The San Antonio, Texas-based company will spend up to $28 million on its two acquisitions, with $11.5 million payable in cash and stock, and the potential for up to $16.5 million in additional payouts of cash and stock based on certain performance criteria.

Slicehost, based in St. Louis, Mo., provides Xen-based virtual machine hosting and claims more than 15,000 “slices” online today. Atlanta-based Jungle Disk, meanwhile, offers a cloud storage product that allows folks to share cloud storage between multiple users through a secure, mountable network drive, as well as automatic backup. It uses Amazon’s Simple Storage Service for its backup and will continue to do so after the acquisition, but according to CEO and founder Dave Wright, will offer Rackspace’s Mosso service as well.

Rackspace also changed the names of its cloud products offered by its cloud hosting division. The company’s existing Hosting Cloud and CloudFS storage offerings are now known as Cloud Sites and Cloud Files, respectively. And it announced the creation of Cloud Server, to offer on-demand server access powered by the Slicehost acquisition. This does get Rackspace closer to a real cloud offering, but it’s still has some pieces to pull together to create an offering that rivals Amazon’s.

Amazon last month launched its own content delivery network for example. Rackspace is trying to keep up, through these acquisitions and even a CDN efforts also announced today. Rackspace signed a partnership agreement with Limelight Networks to ensure the fast and reliable delivery of data to and from the Mosso cloud products. But Rackspace still appears to have a ways to go before it can beat Amazon at the web services game.

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  1. Rackspace Acquires Jungledisk and Slicehost | CloudAve Wednesday, October 22, 2008

    [...] a new pricing model Ballmer Doesn't Think World Is Ready For Cloud Computing [Steve Ballmer]Rackspace Buys Two Startups to Beat Amazon's CloudRackspace Acquires JungleDisk, Slicehost Posted Under : General Analysis Tags cloud computing [...]

  2. Rackspace Cloud Hosting: Sites, Files & Servers | Laughing Squid Wednesday, October 22, 2008

    [...] – GigaOm [...]

  3. Rackspace Cloud Hosting: Sites, Files & Servers | Laughing Squid Wednesday, October 22, 2008

    [...] – GigaOm [...]

  4. Content Delivery Network Blog | CDN Evangelist » Blog Archive » Rackspace Buys Two Startups to Beat Amazon’s Cloud Wednesday, October 22, 2008

    [...] http://gigaom.com/2008/10/22/rackspace-buys-two-startups-to-beat-amazons-cloud/ This entry was posted on Wednesday, October 22nd, 2008 at 6:35 pm and is filed under CDN. You can [...]

  5. Roundup: Moore’s Law extended, AT&T pays Apple $900M, Bill Gates’ new venture and more » VentureBeat Thursday, October 23, 2008

    [...] buys two cloud companies — In a bid to compete with Amazon’s cloud services, hosting company Rackspace has bought Slicehost and Jungle [...]

  6. Roundup: Moore’s Law extended, AT&T pays Apple $900M, Bill Gates’ new venture and more » VentureBeat Thursday, October 23, 2008

    [...] buys two cloud companies — In a bid to compete with Amazon’s cloud services, hosting company Rackspace has bought Slicehost and Jungle [...]

  7. Amazon Opens Windows For All, and EC2 Graduates – GigaOM Thursday, October 23, 2008

    [...] agreement. Yesterday, Rackspace ran hard to keep up with Amazon’s cloud offerings — acquiring two startups — but, with a full production computing cloud out of beta, it looks like Amazon is still in [...]

  8. Rackspace buys two startups to boost cloud based services « Phil Derksen Thursday, October 23, 2008

    [...] details at TechCrunch and GigaOM. Possibly related posts: (automatically generated)Jungledisk – Online storage application £Cloud [...]

  9. Search SMB Asia Thursday, October 23, 2008

    I love their service.
    Below is a video from Rackspace CEO, who shares his thought on cloud computing and hosting trends.
    http://www.searchsmbasia.com/content/cloud-computing-hosting-trends-smbs

  10. I’ve been using Jungle Disk for over a year (after multiple updates) it has been really, really stable. What is strange about this news is that Jungle Disk has been using Amazon’s Web services (excess capacity) to deliver. Selfishly, will my files continue to be located on Amazon’s iron, or will they be transfered to RackSpace?

    Either way, this kind of news bodes well for Cloud Computing in general. We believe that Cloud Computing will be the lubricant to get companies through this tough economic period. In our case, we are a NetSuite provider. Our career experiences were in the Fortune 500 IT arena. We were collectively blown away by the power of NetSuite compared to the systems our former company had spent millions on. The fact that Software as a Service (SaaS) makes access to amazing applications extremely affordable is critically necessary for companies to make progress when things are tight.

    After you finish watching the Rackspace CEO talk about Cloud Computing, you might watch ours (35 year Fortune 500 CIO whose mantra has become “less IT”) do the same: http://www.youtube.com/watch?v=FgdjrLDLxuo

  11. Now Amazon got good competitor. This will improve server hosting market. People was not much aware with cloud computing. Only big players were thinking for cloud computing, small sites with less traffic & less technical capability has not thought about it. I think this kind of competition will bring market to next level.

  12. Cloud News from Amazon and Rackspace « SmoothSpan Blog Friday, October 24, 2008

    [...] also point to what I think we’ll see as a major trend and that Stacey Higginbotham at GigaOm has picked up on:  hosting vendors need to start thinking about how they can transition to being cloud vendors as [...]

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    [...] at Amazon and now Microsoft.  Google also recently announced the support of Java.  Another set of aquisitions at Rackspace in the buying of Slicehost and JungleDisk also seem to show the space heating up and the companies all believing in the cloud platform [...]

  14. Rackspace Offers Cloud Computing for Cautious Customers Thursday, March 12, 2009

    [...] is expected to announce its own on-demand computing product, CloudServers. The service is built on the company’s acqusition of Slicehost last year and will offer the same services as Amazon Web Services’ Elastic Compute Cloud. It’s [...]

  15. Rackspace Opens Up Its Cloud for All Tuesday, July 14, 2009

    [...] its control panel to manually allocate the necessary servers. This helps bring Cloud Servers, which Rackspace acquired through its purchase of Slicehost last year, into the same league as Amazon’s EC2, which already allows developers to build [...]

  16. Rackspace Opens Up Its Cloud for All | Tech Newz Tuesday, July 14, 2009

    [...] its control panel to manually allocate the necessary servers. This helps bring Cloud Servers, which Rackspace acquired through its purchase of Slicehost last year, into the same league as Amazon’s EC2, which already allows developers to build [...]

  17. Rackspace opens its cloud | Tuesday, July 14, 2009

    [...] its control panel to manually allocate the necessary servers. This helps bring Cloud Servers, which Rackspace acquired through its purchase of Slicehost last year, into the same league as Amazon’s EC2, which already allows developers to build [...]

  18. Will Rackspace Partnership Save FathomDB? – GigaOM Thursday, December 17, 2009

    [...] that company’s rival service. Signing up with Rackspace gives it a protector (and one that likes to buy innovative startups), and also adds some competition to the emerging database-in-the-cloud market. Microsoft has one [...]

  19. How Heroku-Salesforce Deal Impacts Amazon Web Services: Cloud « Wednesday, December 8, 2010

    [...] the looks of it, Salesforce is in competition with Amazon. It has known to happen — when Rackspace bought Jungledisk, it kept AWS but expanded the storage service on its own platform. As I looked for answers, the [...]

  20. Rackspace Shares its CDN Love with Akamai: Cloud Computing News « Wednesday, January 12, 2011

    [...] already has a CDN partnership in place with Akamai competitor Limelight Networks, but Akamai is the CDN market leader. Extending Rackspace support to Akamai services will make [...]

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