Tuesday, September 9, 2014

CenturyLink Looking to Acquire Rackspace, A Hosting Company

English: I took picture of Century Link corpor...
English: I took picture of Century Link corporate headquarters in Monroe, LA, with Canon camera. (Photo credit: Wikipedia)
It's the buzz of the tech world, phone service provide CenturyLink Inc. is seeking to acquire Rackspace Hosting Inc in order to boost its cloud computing services and increase its competitive stakes. Bloomberg broke the news today citing people familiar with the situation suggesting that CenturyLink is looking to acquire hosting company Rackspace.

Bloomberg has the story, CenturyLink has discussed the possibility of takeover bid with Rackspace, which last month said it is still in the process of conducting internal review of its strategic option, according to the people familiar with the situation. One person told Bloomberg the deal to acquire the $5.33 Billion hosting company might not be reached.

The deal would add more "internet muscles" and expand CenturyLink's current offerings, enabling it to better compete against companies like Amazon, Microsoft and Google. 

Texas-based Rackspace is a managed computing company and founder of OpenStack, the open-source operating system for the cloud. Rackspace has seen some troubled times and have been trying to compete with larger vendor is its model. the company has tried to differentiate itself based on its high level of support, unfortunately Rackspace's strategy won't work in today's market. Rackspace has seen serious trouble in the market, it losing market share fast. 

Monroe-based CenturyLink is a traditional telco that has been spending up large to reinvent itself as a credible cloud player in the market, trying to compete with the likes of Amazon and Google. CenturyLink provides communications and data services to residential, business, governmental and wholesale customers, it operates as a local exchange carrier and Internet service provider in U.S. markets and the third-largest telecommunications company in the United States in terms of lines served, behind leader Verizon and AT&T.

CenturyLink has built its current cloud presence via the acquisition of two key companies:-Tier 3 last year and its massive $2.5 billion acquisition of Savvis in 2011, it's acquisitive nature in laaS gives reason to believe that it might be interested in acquiring Rackspace.

Moving to the cloud has always been a popular trend and option for most companies looking to save on the high cost of acquiring expensive computing equipments, storage works and operating its own data centers.

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