One of the biggest stories to hit the web hosting world this year is the acquisition of TriCore Solutions by Rackspace.
Rackspace, a managed cloud computing company, announced in May of 2017 that it had reached an agreement to acquire TriCore Solutions, and the deal closed in June 2017. The terms of the deal, including the amount of money changing hands, are not known. However, Rackspace did call it the largest acquisition in the history of the company. It marks a continuation of Rackspace’s move away from web hosting and into managed services.
Who is Rackspace?
Rackspace is one of the world’s largest managed cloud services companies. It provides expertise, support, and specific applications for cloud platforms such as Amazon Web Services, Google, and Microsoft. Rackspace serves businesses in over 150 countries, and work with more than half of the Fortune 100. It started life as a cloud hosting provider, but have found it difficult to compete with the massive hosting companies such as Amazon Web Services and IBM, hence the move into the service industry.
Rackspace is owned primarily by the private equity firm, Apollo Global Management, who took them off the public trading market in 2016, following a $4.3 billion deal. Revenues at Rackspace are at an all-time high, and the number of accounts serviced grew by 500% last year.
Who is TriCore?
TriCore Solutions was founded in 1999 in Massachusetts, with its headquarters still in Norwell, MA. TriCore specializes in enterprise applications management, providing a full selection of scale-able managed application, cloud, and infrastructure hosting. It also provides business consulting services. TriCore is known for exceptional service, a great customer experience, and accelerated innovation. They work with 275 businesses worldwide, employing approximately 500 people.
Why is Rackspace Buying TriCore?
Rackspace has found it hard to compete as a specialized web host, and have moved into managed services. According to Rackspace, customers have been demanding not just hosting services, but also the ability to manage applications for enterprise software giants such as Oracle or SAP. Integration with TriCore allows Rackspace to meet these demands.
Companies want their backend to be a one-stop shop, so they don’t have to deal with numerous disparate companies. Rackspace is moving toward becoming a one-stop shop for their customers by acquiring TriCore Solutions.
Rackspace Will Grow
This deal allows Rackspace to compete and grow in a new area of business. It should lead to improved financial results. Rackspace aims to be a leader in application management on a global scale, and this deal helps it achieve this. It can put aside trying to compete with the likes of Amazon Web Services and concentrate on a game it has a chance of winning.
It shows the companies are listening to their customers and putting their money where their mouth is to meet their needs. If you’re a Rackspace customer, your choice of applications management just got wider.
Rackspace and TriCore Changes Coming
In the immediate future, there will be some slight changes for Rackspace and TriCore. In the same week, as the TriCore deal was announced, Rackspace announced the arrival of a new CEO, Joe Eazor. TriCore’s CEO, Mark Clayman, will move to the new position as Senior Operational Leader. The two companies will be run separately for the time being.
Rackspace’s stated aim to become a global leader in their new field makes you think that this isn’t the end of its investment. There could well be new acquisition targets that Rackspace will be looking at soon.
In the wider world, this deal indicates the company is betting big that their clients will be migrating en masse from physical servers to the cloud in the near future, requiring managed services to help them achieve a successful transition.
Whatever happens, Web Hosting Sun will keep to up to date with all developments in this fast-moving industry.