Darspal S Mann
Follow The Data
Follow The Data
Nov. 19, 2015, 5:21 PM
- Google (GOOG, GOOGL) has bought Bebop Technologies, a stealth-mode startup that has been working on an enterprise cloud app development platform, and which was founded by VMware co-founder and Google board member Diane Greene.
- Greene will now lead a new unit containing all of Google's cloud businesses, including Google Apps (productivity apps), Google for Work (custom versions of Google products for enterprises), and the Google Cloud Platform (cloud infrastructure and app platform services). CEO Sundar Pichai declares the move will "bring together product, engineering, marketing and sales and allow us to operate in a much more integrated, coordinated fashion."
- Pichai provides some vague details regarding Bebop: "[B]ebop is a new development platform that makes it easy to build and maintain enterprise applications ... bebop and its stellar team will help us provide integrated cloud products at every level: end-user platforms like Android and Chromebooks, infrastructure and services in Google Cloud Platform, developer frameworks for mobile and enterprise users, and end-user applications like Gmail and Docs."
- The move comes shortly after Google SVP Urs Hölze proclaimed (in remarks that may or may not have been blessed by Google's brass) the company's Cloud Platform revenue could surpass its ad revenue in five years. With 90% of Google's Q3 revenue coming from ads (and much of the rest from hardware, Google Play, etc.), that could prove a tall order.
- Rackspace (NYSE:RAX) fell 6.1% in regular trading, with Hölze's remarks having been mentioned as a potential culprit. Stifel defended Rackspace, arguing the remarks were misunderstood and that Rackspace will eventually strike a deal to provide managed services for Google's cloud offerings, much as it has with Amazon and Microsoft.
- Synergy Research estimates Google is the 4th-largest player in the in the broader market for public, private, and hybrid cloud services, trailing IBM, Microsoft, and 800-lb. gorilla Amazon. The company has tried to differentiate its cloud offerings by emphasizing developer needs; the Bebop acquisition fits with that effort.
Jul. 14, 2015, 1:13 PM
- A day after Rackspace (NYSE:RAX) announced a services partnership with Microsoft related to Azure, shares are rallying in response to a CRN report stating a similar deal with Amazon Web Services (NASDAQ:AMZN) is close.
- CRN states a channel partner for both Rackspace and Amazon "approached his company with an offer to participate in a beta program in which Rackspace would manage and provide support for his customers hosting workloads in Amazon's cloud." The source: "They are going to wrap their managed 'Fanatical Support' around AWS and essentially become an Amazon reseller."
- AWS had revenue of $5.16B over the 12 months ending March 31, and (per Synergy Research) still controls nearly 30% of the global cloud IaaS/PaaS market.
- Rackspace is now up 8.5% over the last two days. Shares are still down 17% YTD.
Jun. 3, 2015, 1:26 PM
- IBM (IBM +0.1%) has acquired Blue Box, a provider of managed cloud services for companies deploying private and hybrid clouds based on the open-source OpenStack cloud infrastructure (IaaS) platform.
- Cisco (CSCO +0.1%) is buying Piston Cloud Computing, a provider of software (called CloudOS) for managing and deploying services on commodity servers running OpenStack, as well as popular big data/analytics software platforms such as Hadoop and Spark. Terms for both deals are undisclosed.
- IBM, whose SoftLayer unit already offers OpenStack services, will use Blue Box to "help businesses rapidly integrate their cloud-based applications and on-premises systems into OpenStack-based managed cloud," and that the deal allows it to offer a remotely-managed OpenStack private cloud solution.
- Cisco asserts Piston and its engineers will "help accelerate the product, delivery, and operational capabilities" of its Intercloud platform, which (via service provider partners) provides a network of OpenStack cloud infrastructures running on Cisco hardware and software, and within which workloads can be moved between data centers. It also expects Piston to strengthen its OpenStack private cloud offering, the fruits of last year's acquisition of private cloud services provider Metacloud.
- IBM ended Q1 on a $3.8B/year run rate for its various "cloud delivered as a service" offerings. Synergy Research believes IBM is the third-largest player in the public/private/hybrid cloud services space, trailing Amazon (easily the market leader) and Microsoft.
- Many tech/telecom giants have embraced OpenStack in their efforts to compete against Amazon, Microsoft, and Google's proprietary platforms. Rackspace (RAX +0.7%) remains a top independent OpenStack provider
Sep. 8, 2014, 2:05 AM
- Following months of takeover speculation and a strategic review that started in May, CenturyLink (NYSE:CTL) is now looking to acquire Rackspace (NYSE:RAX), Bloomberg reports.
- A deal would enable CenturyLink to better compete against competitors by expanding its offerings of Internet and cloud services.
- Rackspace’s sales climbed 17% in 2013 to $1.5B, with $415.2M coming from cloud computing. CenturyLink’s revenue declined 1.5% to $18.1B last year.
Jul. 11, 2014, 5:45 PM
- Rackspace (RAX -5.4%) has received "only modest buyer interest" since putting itself on the block, BrightWire reports. Shares have added to the Thursday losses they saw following a re/code report stating sources have denied H-P made a bid.
- BrightWire states CenturyLink (CTL - unchanged) "made an initial overture" to buy Rackspace, but adds its interest "was only casual and soon faded." Citi made the case for a Rackspace/CenturyLink deal last month.
- Separately, Wells Fargo's Gary Powell says talks make him consider a Rackspace LBO deal (would involve P-E firms) unlikely, and that the market has "correctly assumed" a 70%+ probability that no strategic buyer (i.e. a tech company) will emerge.
- Nonetheless, Powell reiterates an Outperform, and calls Rackspace's asset value under-appreciated. He adds CenturyLink and H-P "have not completely ruled out a potential deal with RAX."
Jul. 10, 2014, 12:51 PM
- Mark Interrante, until now Rackspace's (RAX -2.1%) SVP of products and engineering, has been hired by H-P (HPQ +0.4%) to be the SVP of engineering for the company's cloud services unit
- Both H-P and Rackspace offer cloud infrastructure (IaaS) services based on the OpenStack platform; Rackspace is an early leader within the market. H-P also offers cloud app platform (PaaS) services with the help of a partnership with Cloud Foundry (a part of EMC/VMware's Pivotal spinoff). Each company faces intense competition from Amazon, Google, and Microsoft.
- Meanwhile, re/code states multiple sources have "categorically denied" a TechCrunch report stating H-P made a $43/share bid for Rackspace. As it is, dealReporter had expressed skepticism about the reliability of a source providing similar info.
Jun. 20, 2014, 10:10 AM
- Acquiring Rackspace (RAX +1%) would double CenturyLink's (CTL - unchanged) data services revenue, boost top-line growth, increase "customer stickiness," and "modestly [raise] leverage," writes Citi's David Phipps, making the case for a deal.
- At the same time, Phipps estimates a deal for Rackspace ($5.3B current market cap) would require ~$6B in financing, which in turn would lead to a credit downgrade for CenturyLink.
- CenturyLink spent $2.5B in 2011 to buy Web hosting and cloud infrastructure (IaaS) firm Savvis. But it also took a $1.1B charge last fall for its data hosting unit. The company has since bought another IaaS firm (Tier 3), and begun moving its managed data services to its cloud.
- Rackspace, a major Web host and the top provider of IaaS services based on the OpenStack platform, has reportedly hired Morgan Stanley to evaluate "inbound strategic proposals" and other options.
- Both Rackspace and CenturyLink are facing intense price competition from market leader Amazon, as well as Microsoft and Google.
- Previous: CenturyLink counting on data centers, network to challenge Amazon
May 15, 2014, 4:13 PM
- Bloomberg reports Rackspace (RAX +9.6%) has hired Morgan Stanley to evaluate "inbound strategic proposals" and other options. Shares spiked shortly before the close, and are up another 1.2% AH.
- Rackspace jumped earlier this week on a Q1 beat and solid guidance, but shares remain well off their Jan. '13 high of $81.36, thanks in part to worries about intense cloud infrastructure (IaaS) price pressure, and the impact of IaaS services on Rackspace's traditional hosting business.
- The February retirement of CEO Lanham Napier has already fueled M&A speculation.
Apr. 4, 2014, 12:01 PM
- Vague M&A chatter is providing a boost to Rackspace (RAX +4.2%) on a down day for tech stocks.
- The Web hosting/cloud infrastructure provider is no stranger to M&A speculation. The recent retirement of long-time CEO Lanham Napier might be making investors more willing to believe Rackspace could be sold.
- Over 11% of the float was shorted as of March 14.
Feb. 24, 2014, 11:36 AM
- IBM (IBM +1%) is acquiring Cloudant, provider of a distributed cloud database platform for app developers. Terms are undisclosed.
- Cloudant's customer base includes Samsung, Microsoft, Adobe, and Fidelity. The company already relies on IBM-acquired SoftLayer's cloud infrastructure platform to deliver its services, which compete against Amazon Web Services' DynamoDB and solutions based on the open-source MongoDB.
- All three solutions rely on NoSQL, a database architecture that differs from the age-old SQL (used by IBM's DB2, as well as ORCL's bread-and-butter database) through its support for semi-structured and unstructured data.
- This feature, along with NoSQL's superior performance and scalability for certain apps, is leading the technology to be widely adopted for handling Web/cloud services and big data projects.
- Separately, IBM is promising to invest $1B to bolster SoftLayer's cloud software/app platform offerings. Last month, Big Blue, increasingly looking to cloud services to halt its ongoing revenue declines, said it would invest $1.2B to build 15 new data centers for SoftLayer.
- IBM/SoftLayer rival Rackspace (RAX +2.4%) owns a piece of Cloudant.
Oct. 24, 2013, 11:18 AM
- Rackspace (RAX +1%) has acquired ZeroVM, an Israeli startup that has developed server virtualization software (i.e. a hypervisor) built with the cloud services needs in mind. Terms are undisclosed.
- ZeroVM asserts its hypervisor is differentiated from rival solutions (VMware's vSphere, Microsoft's Hyper-V, etc.) by an ability to virtualize only the parts of a server needed for a particular app, thereby improving performance, deployment times, and resource efficiency. The company also sees its approach yielding better data security for big data/analytics applications.
- With its OpenStack cloud infrastructure offerings facing intense price competition from Amazon, Google, and Microsoft, Rackspace has been looking to differentiate by promising better performance and service quality. ZeroVM's hypervisor could help on this count.
- Q3 results are due on Nov. 11.
Jun. 4, 2013, 9:46 AMIBM is acquiring web hosting/cloud infrastructure services firm SoftLayer for an undisclosed sum - with Reuters talking of a $2B+ deal price in March, there's a good chance the price tag is in ten digits. The deal represents a big expansion of IBM's cloud services push - IBM says it will create a new Cloud Services unit that combines SoftLayer with the company's SmartCloud unit. SoftLayer already claims 21K customers over 13 data centers, and IBM promises to expand its offerings to cover the OpenStack platform (previous). Rackspace (RAX -2.1%), a SoftLayer rival, top OpenStack proponent, and one-time subject of an IBM M&A rumor, is lower. | Jun. 4, 2013, 9:46 AM
May 2, 2013, 12:54 PM
Rackspace (RAX +3.1%) catches a bid on fresh speculation IBM is considering a bid for the company - a former IBM exec told GigaOm last month the IT giant has eyed both Rackspace and rival SoftLayer as M&A targets. Rackspace's Q1 report arrives on May 8; 12.3% of the float was shorted as of April 15. (also)| May 2, 2013, 12:54 PM
Mar. 15, 2013, 6:37 PMIBM has recently eyed both Rackspace (RAX) and SoftLayer as buyout targets, a former IBM exec tells GigaOm. Meanwhile, EMC is said to be uninterested in SoftLayer - Reuters reported yesterday both EMC and IBM have been in talks to buy the company. Rackspace (unlike SoftLayer) is a major backer of the OpenStack cloud infrastructure platform, which IBM just threw its weight behind. The former exec notes IBM's historical preference to flesh out its product lines via M&A. "IBM does not want to fund its own development because past history shows we’re not very good at it." | Mar. 15, 2013, 6:37 PM
Mar. 14, 2013, 5:42 PMIBM and EMC are among the companies in the running to buy Web hosting/cloud infrastructure provider SoftLayer Technologies in a deal that could sport a $2B+ price tag, Reuters reports. SoftLayer, locked in fierce competition with Rackspace (RAX) and Amazon, differentiates itself in part by offering hybrid solutions that feature both dedicated and virtual servers. The report comes as IBM targets $7B in 2015 cloud revenue, and EMC subsidiary VMware (VMW) launches a new cloud infrastructure service. | Mar. 14, 2013, 5:42 PM
Feb. 27, 2013, 11:08 AM
Rackspace (RAX -0.2%) expands its cloud database offerings by acquiring ObjectRocket, a provider of hosted unstructured databases relying on the increasingly popular NoSQL structure. Rackspace already supports a variety of structured database platforms; NoSQL, often used in big data projects, can provide better scalability and support for unconventional data formats, at the expense of consistency. Terms aren't disclosed.| Feb. 27, 2013, 11:08 AM