Thursday, 23 October 2008

Rackspace Snaps Up JungleDisk, Slicehost to Compete Against Amazon’s Cloud

Rackspace, a provider of hosted computing services, announced to have acquired JungleDisk, an online backup service, and Virtual Machine provider Slicehost in a deal designed to help bolster its offerings against top competitor Amazon Web Services.

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

Rackspace also announced a new suite of services, Rackspace Cloud Hosting, which combines a hosting platform (CloudSites) with a cloud storage solution (CloudFS, which is recently renamed as Cloud Files), and, in the long run, a tight integration with Slicehost's services. The pricing for storage on Rackspace's CloudFS is similar to Amazon's current offering, though data transfer is considerably more expensive.

With these new services, Rackspace is directly competing with Amazon's Web services. The JungleDisk acquisition and the new cloud storage services go up against Amazon's S3, while the Slicehost acquisition competes directly with Amazon's Elastic Compute Cloud.