Yup. More cloud M&A

Datapipe snaps up GoGrid as (sigh) cloud consolidation continues

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It’s three weeks into 2015 and here’s the first cloud deal of the year: Managed service provider Datapipe is buying GoGrid, an infrastructure-as-a-service vendor that has been morphing into a big data specialist. Terms were not disclosed, but the deal indicates that the consolidation that swept the cloud provider market in 2014 continues, as some predicted.

[company]GoGrid[/company], with its big data expertise — it recently partnered with Cloudera to accelerate enterprise Hadoop deployments —  will boost Datapipe’s quest to become a global provider of managed services across workload types, [company]Datapipe[/company] CMO Craig Sowell said in an interview.

Datapipe, headquartered in Jersey City, New Jersey, hasn’t been shy about using acquisitions to further its cloud agenda: In September 2013, it bought Newvem, a provider of [company]Amazon[/company] Web Services monitoring and optimization services, and last August it purchased Layered Tech, an MSP specializing in federal government implementations. Terms were not announced there either.

Wanted: Scale across geographies and workloads

[company]Newvem[/company] was a strategic acquisition to gain expertise in analyzing and optimizing AWS, as Datapipe provides managed AWS services. “We saw the explosion of data that AWS usage generates required a big data tool to understand it and [company]Layered Tech[/company] was about expanding into the federal government market — they had FISMA and provisional FedRAMP compliance and we expect ot be fully FedRAMP compliant shortly. That will let us bring managed AWS to federal accounts,” Sowell said.

FISMA, or the Federal Information Security Management Act of 2002, is a framework for protecting government information and operations against natural or man-made threats while FedRAMP (Federal Risk and Authorization Management Program) is a standard way to vet or approve cloud computing deployments. AWS achieved its FedRAMP certification about two years ago.

By buying GoGrid, Datapipe also adds new data center coverage in San Francisco and Amsterdam to its roster, which already includes data center presence in Shanghai; Iceland, London; Singapore; and 8 other U.S. locations.

Datapipe is already a global provider, Sowell said, but acknowledged the need to keep scaling and delivering more services worldwide across all workloads and segments is the plan.

Datapipe’s sales pitch is that it can act as the IT arm of an account and manage multiple cloud vendors, taking that off the plates of internal staff. Datapipe supports VMware for private and hybrid cloud, but in the public cloud space it remains focused on AWS only.

Sooo, who’s next on the block?

With GoGrid gone, along with Metacloud (now part of Cisco), Eucalyptus (now [company]HP[/company]), Cloudscaling (now [company]EMC[/company]); and SoftLayer (now [company]IBM[/company]), the question of who’s next arises yet again.

Doubtless all eyes will again turn to Rackspace, which apparently was too rich for IBM’s blood a few years ago. But there are a bunch of other still-independent entities such as CloudSigma, [company]Digital Ocean[/company], [company]Joyent[/company], [company]Mirantis[/company]  and [company]ProfitBricks[/company] still out there.

A reasonable person might think that some of the legacy enterprise software companies — Oracle? SAP? — might still be in the market for more cloud expertise.

Datapipe data center map

6 Responses to “Datapipe snaps up GoGrid as (sigh) cloud consolidation continues”

  1. TechYogJosh

    It is strange that the author put Eucalyptus with cloud-based hosting providers. Eucalyptus was a software company enterprises used to develop internal clouds (much like OpenStack). However, the broader gist of the article is perfectly synched with the market. IaaS is not a space to be in unless you have great scale. Actually this can be said for the entire hosting market. Cloud is just fastening the demise of the also ran. Rackspace must be the next.

  2. asharbaig

    IaaS is getting commoditized. In the future, SaaS and Managed services will be the money makers. More and more enterprises are looking for purpose-built turnkey solutions. MSPs provide that. Today, owning infrastructure is not a competitive advantage for MSPs. There are dozens of providers offering their infrastructure on a wholesale basis. Customers care more about the SLAs they are promised by their MSP not the infrastructure itself. That is the reason we have seen over a dozen MSPs who use AWS as their infrastructure.

  3. bmccallion

    Interesting and inevitable. Looking at the DataPipe map of data centers it looks like DataPipe itself is planning to be acquired and working to make things simple for the acquirer. In 2015 I think its inevitable we’ll see a new AWS region spring up in Secaucus NJ, and Dallas looks like a nice spot as well. But I expect we’ll see something new and bold in Secaucus first.

      • bmccallion

        Yes, wrt to hybrid story. And also it seems like if Datapipe could snap up a few locations AWS could avoid telegraphing its strategy. When I read about the wind power partnership that area in Indiana also seems like a likely location for a data center between NYC and Chicago.

      • bmccallion

        Yes, wrt to hybrid story. And also it seems like if Datapipe could snap up a few locations AWS could avoid telegraphing its strategy. When I read about the wind power partnership that area in Indiana also seems like a likely location for a data center between NYC and Chicago. As for Hybrid, I think we’ll see Workplace products move core systems from the data center to the Cloud. I see the Cloud players going after Verizon and AT&T and taking on the wireless space. AWS’s recent announcement that OpsWorks can manage data center systems suggests to me AWS will focus on low latency connections from corporate data center to Cloud so as to avoid feeding firms like Equinix to the point where they have enough scale and influence to pose a problem to Cloud Service Providers. I think the Cloud Service Providers seek a way to leap frog the colos.