Rackspace Enters the Cloud-based IT Services Arena with Its Anso Labs Acquisition

Event Summary

March 1, 2011: BT expands its Virtual Data Centre with ‘VDC Connect’ linking to company networks using MPLS, Ethernet or leased line. ‘Customer Virtual Server’ automates migration of existing servers to VDC On Demand. New consultancy services include ‘VDC Assess’ and ‘VDC Migrate’. BT also announced a Managed Virtual Firewall Service, providing cloud-based security where BT handles set-up for customers in a BT data centre and handles updates, configuration, maintenance, license management and monitoring.

Quick Take

Analytical Summary

• Current Perspective: Positive on Rackspace’s launch of an IT services business built around its acquisition of Anso Labs’ development expertise in OpenStack, because the new business, ‘Cloud Builders’, is a good complement to its existing data center services. The initial range of services is diverse and useful to target customers without being overly ambitious. Though the portfolio is not comprehensive, its variety from training and certification to deployment services will allow the new operation to find sustaining business in customer niches while its reputation and experience expands.

• Vendor Importance: Positive to Rackspace, because its purchase of Anso Labs shows continued drive in its cloud strategy. This builds on its launch of Hybrid Cloud services and its CloudKick acquisition, giving Rackspace a route to progress clients further up the value chain from its existing range of traditional data center and cloud services. Rackspace has been able to secure business from large organizations as well as small, and this move helps its sales teams to justify broader and continued interest from within large accounts accounts during harsh economic times.

• Market Impact: Moderate on the IT services market, because the operation is starting very small and is initially restricted to the US launch. Rackspace is trying to establish itself in the highly competitive IT services market targeting large organizations, for whom existing relevant market presence and reputation is a significant asset for providers trying to get on prospective clients’ shortlists. To begin with Rackspace’s entry will not disturb established players.

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