Rackspace Acquires Cloudkick Getting Ready For A Federated Clouds Future

Image by Laughing Squid via Flickr

Rackspace, a leading player in the traditional hosting world with some level of difficulty gaining traction in the cloud based world, today announced the acquisition of Cloudkick, one of the cloud management vendors with a pretty dashboard having HTML 5 based 3D server visualization. Rackspace is mum on the details of valuation. Interestingly, this is the first cloud management vendor to be acquired in the public cloud space and, few years from now, we may even see this as the beginning of an acquisition trend.

How does Cloudkick fit into Rackspace?

Before I offer my own take on how this acquisition fits into Rackspace’s plans, I will first quote Rackspace’s own thinking on this acquisition.

Rackspace has big plans to incorporate the Cloudkick suite into our hosting and cloud services. Rackspace customers (or anyone managing servers anywhere) can easily add their servers to the Cloudkick dashboard and start to experience its magic. In the coming months, Cloudkick and Rackspace toolsets will become more integrated, including full incorporation into our managed service level.

I guess this clearly spells out their short term strategy on how they are going to put Cloudkick to use.

My Take

Before I start, I want to warn readers that the following sections may border along the lines of conspiracy theory but it is a realistic possibility that cannot be dismissed outright. There is no fun in reporting along the lines of Rackspace’s PR. I feel that analysts should think from different angles and if you agree with me on the role of an analyst, this is one such angle. Knowing Rackspace’s position in the current IaaS market, this is definitely a possibility unless Rackspace changes track and makes some interesting acquisitions.

If you really want to see how Rackspace will put Cloudkick to use in the short term, look at Jungledisk, their acquisition couple of years back when they went big on cloud computing. Jungledisk, like Cloudkick, supports other cloud provider(s) and, when they acquired Jungledisk, Rackspace claimed that they will continue to support Amazon S3. Till today, they have stayed true to that statement. However, they have cleverly used the tool to lure users into Rackspace Cloud Files by offering paid features like data transfer and data request (both upload and download) free. If their Jungledisk strategy is any indication, they are going to use Cloudkick in the same way. They are going to let Cloudkick support other cloud providers and dedicated servers (well, as long as people continue using it) but they might use it as a tool to lure users into Rackspace cloud by offering a tighter integration and, probably, by offering some features for free or at a lower price compared to the competing providers. More importantly, this will be a great tool for Rackspace to differentiate their offerings from competing services to the actual users of cloud.

In the long term, I see Rackspace becoming more of a cloud management player on the infrastructure level of the stack. In spite of what hardware vendors want you to believe, IaaS layer is going to be dominated by commodity hardware and there is very little value an IaaS provider can offer to differentiate themselves from competition. I think Rackspace realized this long back and open sourced their compute and storage platforms (see CloudAve coverage of OpenStack). They want to put their strength, their fanatical support, to use in the cloud based world. It was evident when they made their announcement about Managed Cloud Services on tuesday. With the Cloudkick acquisition and their plans to deeply integrate Cloudkick with Managed Services, their plans to focus on the management is getting more and more obvious.

There is another factor into Rackspace’s thinking, OpenStack. If my expectations and Rackspace’s expectations turn out to be true, OpenStack is going to get lot of traction leading to what I call as “Open Federated Cloud ecosystem”. If the infrastructure services market goes in this direction, this move by Rackspace is going to put them as a major player in the market. By default, Cloudkick or any other Rackspace service is going to be tightly integrated with OpenStack and the success of OpenStack will, in a way, define the future of Rackspace.

Conclusion

Even though it is easy to dismiss the above take, I clearly see this as one of the many paths for Rackspace into the future. If I couple this acquisition to their announcement about managed cloud services and OpenStack, my take above appears more realistic. What do you think? Do you think Rackspace will go big on the cloud management space or I am completely on a wrong track with my analysis. Feel free to jump in and add your thoughts.

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• Rackspace Acquires Cloudkick for Cloud Server Management Apps (webpronews.com)
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• Cloudkick joins the Rackspace Family (cloudkick.com)
• Welcome Cloudkick to the Rackspace Family; Fanatical Support Gets New Tools (rackspacecloud.com)
• Rackspace in heavenly marriage with server admin kit (go.theregister.com)
• Another Giant Gets Another Sexy Startup: Rackspace Acquires Cloudkick (readwriteweb.com)
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