Rackspace Buys Tricore
It’s been a string of changes at Rackspace. Only last week, the company announced that it has appointed a new CEO and a few days later, it announced that it is acquiring a managed and consulting cloud services company called TriCore Solutions.
The exact terms of the deal was not disclosed though it is speculated that this acquisition can give Rackspace a big boost in terms of its offerings and its stance in the cloud space today. The deal is expected to close by the end of June.
Though the financial details were not disclosed, Rackspace claims that this is the largest ever acquisition that the company has made so far. This is an important statement coming from the company considering that it has so far acquired eight companies, with the last acquisition being in 2013. This data goes to show the importance given by Rackspace to this deal, as the company believes that TriCore’s products and client base can give a big boost to the enterprise applications management segment of cloud.
TriCore specializes in providing Oracle and SAP Enterprise Resource Planning products that include business intelligence, analytics and data integration services. These are deemed as mission critical in most organizations, yet they are hard to manage and can cost the company a ton of money too. This is why most companies prefer to take help when it comes to handling these applications.
Rackspace has a firm footing in these mission critical applications market and to take it to the next level, it has acquired TriCore. In a way, TriCore’s products are complementary to that of Rackspace, so it’s only natural for both these companies to come together to capture a larger share in this market.
This acquisition gives Rackspace the flexibility to not just manage the cloud services of a company, but also move up the stack and manage complex applications from some of the larger vendors such as Oracle and SAP. This upgrade has been something that Rackspace’s customers have been asking frequently in the near past, and to meet their demands, Rackspace has decided to go ahead with the acquisition of TriCore instead of doing any research and development in-house.
This is a sensible move considering that TriCore and Rackspace have a lot in common and can benefit from each other’s expertise and knowledge. Currently, TriCore servers about 275 customers, and after this acquisition, all these customers will become a part of Rackspace. The new CEO of Rackspace, Jeff Cotten, even opined that TriCore’s workspace is similar to Rackspace, so the transition should be smooth for both the companies.
TriCore has about 500 employees and all of them are expected to join Rackspace, though they will continue to work from their existing locations.
The next few months are likely to be crucial for Rackspace as it moves away from competing with large public cloud providers. At present, Rackspace is unable to break the wield of companies like Microsoft, AWS and Google, so it makes sense for it to change its strategy and focus on a smaller niche area.