Rackspace Looks to Expand Cloud Computing Options with Acquisitions

Rackspace Hosting, which had an initial public offering in August, is looking to expand its hosted cloud computing offerings with several acquisitions and partnerships that will allow the company to better compete against Amazon.com and its Amazon Elastic Compute Cloud.

On Oct. 22, Rackspace plans to announce its acquisitions of Slicehost, which has developed Xen-based virtualization technology that partitions virtual servers for companies looking to host applications in the cloud, and Jungle Disk, which makes an application that bridges the gap between the desktop and Amazon S3 (Simple Storage Service). Financial details of the two acquisitions were not made public.

In addition, Rackspace is announcing two partnerships that will allow it to offer new services for those businesses interested in hosting applications in the cloud. The partnerships are with Sonian, a company that provides hosted mail archiving, and Limelight Networks, a high-performance content delivery network provider that has focused on digital video.

The Limelight partnership is important as it will allow Rackspace to offer a CDN (content delivery network) similar to the one Amazon.com announced in September.

At the same time, the acquisition of Jungle Disk now allows Rackspace to offer customers that have Web-based businesses easier access to Amazon.com's storage offering as well as other online storage offerings.

"We want to make the cloud easy to use and combine that with what Rackspace has been doing for years, which is supporting customers and hosting their mission-critical infrastructures," said Rackspace CTO John Engates. "We want to combine the cloud with that and make the best of both worlds available to our customers."

Click here for a rundown of nine online storage and backup providers, including Jungle Disk.

At its most basic, cloud computing allows users to have their applications supported by third-party vendors, such as Amazon.com, Google and traditional hosting companies such as Rackspace, which should reduce IT costs and make the management of these applications easier.

Now that these partnerships and acquisitions are in place, Rackspace will offer what Engates describes as three sets of services for those enterprises interested in hosting applications in the cloud and willing to take a chance on the idea that cloud computing can deliver reduced IT costs.

The first is called Rackspace Cloud Sites, which is a new name for the company's hosted cloud services that had been developed under the Mosso brand. This shared hosting platform was developed to support high-traffic Web sites and offered a pay-as-you-go pricing scale. The hosting platform also supports Windows and Linux.

The second service is called Cloud Files—formerly CloudFS—and offers the type of online storage Amazon.com offers with Amazon S3. Cloud Files will use the technology that Rackspace gained through the Jungle Disk acquisition and also take advantage of the partnership with Limelight Networks to better distribute content through the cloud. For now, Rackspace Cloud Files is only available as a beta.

Finally, Rackspace is developing a third service called Cloud Servers, which will offer server capacity for customer applications in the cloud.

This is where Slicehost, which uses Xen hypervisor technology to partition Linux servers, comes in. Instead of the user waiting to buy time on a physical server, Slicehost and Rackspace can provision a virtual server to provide additional compute resources. For now, Slicehost only works with Linux servers, but Rackspace will eventually add support for Microsoft Windows.

"All of this helps us expand out portfolio," Engates said. "It helps us deliver a comprehensive and integrated suite of solutions, which includes everything from managed hosting all the way into advanced, cloud-based storage. All of this is also under one umbrella."