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Rackspace Technology

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Rackspace US, Incorporated
(dba Rackspace)
Company typePrivate company
IndustryManaged cloud computing
Founded1998; 26 years ago (1998)
Headquarters1 Fanatical Place
City of Windcrest
San Antonio, TX  78218
Key people
Richard Yoo, Dirk Elmendorf, Patrick Condon, Morris Miller, Co-Founders
Graham Weston, Executive Chairman
Taylor Rhodes, President & CEO
RevenueIncrease $1.794 billion (2014)[1]
Increase $163.529 million (2014)[1]
Increase $110.553 million (2014)[1]
Total assetsIncrease $1.624 billion (2014)[1]
Total equityIncrease $1.073 billion (2014)[1]
Websitewww.rackspace.com

Rackspace Inc. is a managed cloud computing company based in Windcrest, Texas, USA, a suburb of San Antonio, Texas. The company also has offices in Australia, the United Kingdom, Switzerland, Israel,[2][3] The Netherlands,[4] India,[5] and Hong Kong, and data centers operating in Texas, Illinois, Virginia, the United Kingdom, Australia, and Hong Kong. The company's email and apps division operates from Blacksburg, VA; other offices are located in Austin, Texas. In 2016, Rackspace closed its San Francisco office. Additionally, in 2016 Rackspace was purchased and taken private by Apollo Global Management LLC.[6]

History

The pre-2008 Rackspace Logo

In 1996, Richard Yoo started a small Internet service provider called Cymitar Network Systems out of his garage apartment in San Antonio, Texas. The company began doing application development work in addition to offering basic Internet access and web hosting. In 1997, Yoo brought on Dirk Elmendorf. When the company began to develop Internet applications as its primary business, the company was re-formed as Cymitar Technology Group. As Cymitar Technology Group grew, Patrick Condon was recruited from California and joined the team in 1998. Coincidentally, all three of the company's founders were students at one time at Trinity University in San Antonio.

Although the founders began as application developers for end users, they found that most companies did not either know how or want to host their applications. The founders wanted to focus on application development–not hosting–but they were unable to find an opportunity to outsource the hosting work. Eventually, the founders realized that it would be better to create a product to serve the hosting need and launch it as a company. Rackspace was launched in October 1998 with Richard Yoo as its CEO. Although most hosting companies focused on the technology end of hosting, Rackspace created its "Fanatical Support" offering to focus on service and support.[7] On March 28, 2000, Rackspace received funding through Norwest Venture Partners and Sequoia Capital. George J. Still, Jr., Managing Partner at Norwest, subsequently joined the Board of Directors.[8]

In 2008, Rackspace moved their headquarters from a building once occupied by Datapoint Corporation to the then-unoccupied Windsor Park Mall in Windcrest, Texas. Rackspace's Chairman, Graham Weston, owned the Montgomery Ward building in the mall until 2006, when it was sold to a developer. The city of Windcrest purchased 111 acres (0.45 km2) south of the mall to create a residential and retail complex.[9] The facility is located next to Roosevelt High School, and many Roosevelt students intern at Rackspace.[citation needed]

The Fortune magazine's "Top 100 Best Companies to Work For 2008" placed Rackspace as #32 the first year that Rackspace applied for consideration. The company was praised for its transparency. Regular "Open Book" meetings are held where the top level leaders share in-depth financial information with all employees.[10] In 2011 and 2013, the company was named as one of the top 100 places to work by Fortune.[11][12]

On August 8, 2008, Rackspace opened for trading on the New York Stock Exchange under the ticker symbol "RAX" after its initial public offering (IPO) in which it raised $187.5 million.[13] The initial public offering included 15,000,000 shares of its common stock at a price of $12.50 per share.[14] The IPO did not do well in the public market and lost about 20% of its initial price almost immediately.[15]

At around 3:45PM CST December 18, 2009, Rackspace experienced an outage for customers using their Dallas-Fort Worth data center – including those of Rackspace Cloud.[16]

On September 8, 2010, Rackspace received national attention when they decided to discontinue providing web hosting service to one of their customers, Dove World Outreach Center.[17] This was in reaction to Dove World's pastor Terry Jones' plan to burn several copies of the Qur'an on the anniversary of the September 11th attacks. Rackspace claims that this violated their company policy. This move came under criticism, notably from Terry Jones himself, who described it as an "indirect attack on our freedom of speech." Others questioned the appropriateness of Rackspace's action, stating that there is "absolutely no reason for web hosts to have an editorial policy, and this only gives Jones more attention, and makes him look more persecuted."[18]

On June 3, 2011, Rackspace intervened in an application by Queensland host Rack Servers to trademark its business name in Australia.[19]

On May 26, 2013, Author Bill Schley's book 'The UnStoppables', which was inspired by the culture at Rackspace, became a New York Times bestseller.[20]

On May 15, 2014, Rackspace hired Morgan Stanley to evaluate strategic options including selling to or merging with other technology companies.[21]

In October, 2014, Rackspace announced that it would sell and support Google Work apps for business customers.[22]

In August 2016, it was confirmed that Apollo Global Management had reached an agreement to buy the company for $4.3 billion.[23] The sale was completed in November 2016 and Rackspace officially ended trading on the New York Stock Exchange on November 3, 2016.[24]

Acquisitions

On October 22, 2008, Rackspace announced it was purchasing cloud storage provider Jungle Disk and VPS provider SliceHost.

On February 16, 2012, Rackspace acquired SharePoint911, a Microsoft SharePoint consulting company based in Cincinnati, Ohio.[25]

Other acquisitions include: Cloudkick, Anso Labs, Mailgun,[26] ObjectRocket,[27] Exceptional Cloud Services, and ZeroVM.[3]

CloudU Credential

CloudU is a professional certification established by Rackspace. The designation certifies that individuals have demonstrated competency, knowledge, skills, and abilities in the blended discipline of cloud computing, through a rigorous qualification and testing program.[28]

Business model

Rackspace has two primary lines of business; Cloud Servers and Dedicated Servers. Rackspace helps design, build, and operate workloads across both environments depending on the individual needs of the customer.

Cloud servers

The Managed Infrastructure service level provides a core set of services necessary to set customers up in the cloud, including architecture advice, security assistance, and code development assistance (through APIs and SDKs).

The Managed Operations support level provides all Managed Infrastructure services plus additional proactive support.

Dedicated servers

The Managed service level consists of on-demand support where proactive services are provided, but the customer can contact Rackspace when they need additional assistance.

The Intensive service level consists of proactive support where many proactive services are provided, and customers receive additional consultations about their server configuration. Highly customized implementations generally fall under this level of support.

Involvement with other companies

Rackspace launched ServerBeach in San Antonio in January 2003 as a lower-cost alternative for dedicated servers designed for technology hobbyists who want flexibility and reliability. Richard Yoo was a catalyst in the startup of ServerBeach. A bandwidth and colocation provider, Peer 1 Hosting now known as Cogeco Peer 1, purchased ServerBeach in October 2004 for $7.5 Million.[29] Peer 1 Hosting entered the UK managed hosting market in January 2009 and the ServerBeach brand now competes directly with the UK arm of Rackspace, run by Dominic Monkhouse, former managing director of Rackspace Limited.[30]

In October 2006, Mosso Inc. was launched, which experimented with white-labeling hosting services.[31] Eventually, the division became the foundation for the Rackspace Cloud Computing offering.

On October 1, 2007, Rackspace acquired Webmail.us, a private e-mail hosting firm located in Blacksburg, VA. Originally branded as Mailtrust on May 20, 2009, it became part of the newly formed Email and Apps division of Rackspace.

On October 22, 2008, Rackspace acquired Slicehost, a provider of virtual servers[32] and Jungle Disk, a provider of online backup software and services.[33]

Expansion into the Asia Pacific region

The company is experiencing growth in the Asian marketplace. The Asian office is a natural step in Rackspace's expansion outside the U.S. and London to cater for worldwide customers’ needs in Hong Kong / China. Currently[when?], rackspace holds 1.60% market share worldwide.[citation needed] Rackspace selected Hong Kong as the Asia Pacific regional office in part because of its reputation within the global business economy, its IT infrastructure, multiple telecommunication providers and rich talent pool. Rackspace also solicited feedback from its current customer base in the Asia Pacific region, and the majority of those respondents confirmed their preference for doing business in Hong Kong.[citation needed]

Worldwide

Rackspace serves customers worldwide and has offices[5] in the United States, Australia, United Kingdom, The Netherlands, Switzerland, Israel, India, and Hong Kong, and data centers in the United States, Australia, United Kingdom, and Hong Kong. Rackspace Benelux in Amsterdam opened its offices in October 2007. Rackspace Australia in Sydney opened its offices in March 2009.

Rackspace is registered in the UK as Rackspace Ltd. and as of 2013 employed approximately 900 people, at an office (in Hayes, London Borough of Hillingdon) and a rented data center (in and around London). The company rented a fourth UK data center in Slough, Berkshire in the second quarter of 2008.

Some organizations served by Rackspace's UK web hosting services include Confused.com, Vue, Renault, online publication The Register, Huddle, Funny or Die, Metacafe, Suicide Girls, and net connect[citation needed].

Awards

In 2014, Rackspace was ranked 29th in the Fortune 100 list of best companies to work for in the US.[34] Starting from 2007, Rackspace has appeared on that list for 6 out of 7 years. Rackspace UK has also appeared in The Sunday Times best employers' awards for each year between 2007 and 2013. The UK division of the company has also been a part of the "Great Place To Work" rankings for 9 consecutive years from 2004, coming in 4th place in 2013 & 6th in 2014.[35]

OpenStack

Main article: OpenStack

In 2010, Rackspace contributed the source code of its Cloud Files product to the OpenStack project under the Apache License to become the OpenStack Object Storage component.[36][37]

In April 2012, Rackspace announced it would implement OpenStack Compute as the underlying technology for their Cloud Servers product. This change introduced a new control panel as well as add-on cloud services offering databases, server monitoring, block storage, and virtual networking.[38] In 2015, two Rackspace executives were elected to the board of the OpenStack Foundation.[39]

References

  1. ^ a b c d e "Rackspace Investor Relations - News & Events - Press Release". Retrieved 27 July 2016.
  2. ^ Clark, Jack (2013-10-25). "Rackspace goes to Israel, picks up slick new weapon for cloud wars". theregister.co.uk. The Register.
  3. ^ a b Shamah, David (2013-11-01). "RackSpace buys out Israeli cloud tech start-up". timesofisrael.com. The Times of Israel.
  4. ^ "rackspace.com – About Us". Retrieved 2007-08-13.
  5. ^ a b "Contact Us". 8 July 2013. Retrieved 27 July 2016.
  6. ^ "Rackspace Completes Previously Announced Transaction with Affiliates of Funds Affiliated with Apollo Global Management to Become a Private Company".
  7. ^ "Web Hosting Interview – Rackspace Managed Hosting". Retrieved 2007-08-13.
  8. ^ "Edgar Online S-1A Filing". Retrieved 2007-11-13.
  9. ^ "San Antonio approves boundary change for Rackspace". Retrieved 2007-08-13.
  10. ^ "Fortune Magazine: 100 Best Companies to Work for 2008". CNN.
  11. ^ "Fortune Magazine". CNN.
  12. ^ "Best Companies to Work For 2013: Full List – Fortune". Money.cnn.com. 2013-01-17. Retrieved 2013-06-27.
  13. ^ "Rackspace IPO needed to cope with fast growth". Networkworld.com. 2008-08-08. Retrieved 2013-06-27.
  14. ^ "Initial Public Offering – Press Release".
  15. ^ "Rackspace IPO tanks".
  16. ^ "Rackspace Goes Down. Again. Takes The Internet With It. Again". Retrieved 2009-12-18.
  17. ^ "Dove World, Terry Jones site pulled down by Web hosting company".
  18. ^ Saint, Nick (September 9, 2010). "San Francisco Chronicle". The San Francisco Chronicle.
  19. ^ "Rackspace opposes local web host trademark".
  20. ^ Best Sellers - The New York Times. Nytimes.com (2013-05-26). Retrieved on 2013-08-09.
  21. ^ "Rackspace hires Morgan Stanley".
  22. ^ Barb Darrow, "Google Apps for Work for customers" Gigaom.com October 7, 2014
  23. ^ Medhora, Narottam (August 26, 2016). "Apollo Global to buy Rackspace Hosting in $4.3 billion deal". Reuters. Retrieved August 26, 2016.
  24. ^ Brezosky, Lynn (3 November 2016). "It's official: Rackspace exiting New York Stock Exchange". Retrieved 3 November 2016.
  25. ^ "Rackspace Buys Up SharePoint911 To Gird For Cloud Fight".
  26. ^ "Rackspace to Improve Cloud-Based Email Services by Acquiring Mailgun Inc".
  27. ^ "ObjectRocket Acquired by Rackspace".
  28. ^ Blogger, Rack (4 November 2011). "CloudU Certificate–A Quick Plug - The Official Rackspace Blog". Retrieved 27 July 2016.
  29. ^ "Peer 1 Buys ServerBeach for $7.5 Million". Retrieved 2007-08-13.
  30. ^ "Peer 1 & ServerBeach enter UK market with ex-Rackspace MD".
  31. ^ "Mosso Leverages Utility Computing to Provide Complete Hosting Solution for Web Professionals". Retrieved 2007-08-13.
  32. ^ "Slicehost Acquired By Rackspace". Retrieved 2011-01-12.
  33. ^ "Jungle Disk Acquired By Rackspace". Retrieved 2011-01-12.
  34. ^ "Fortune 100 Best Companies to Work For®". Retrieved 27 July 2016.
  35. ^ "UK's Best Workplaces: Large Category - Great Place to Work® United Kingdom". Retrieved 27 July 2016.
  36. ^ Moorman, Lew (2010-07-18). "Opening The Rackspace Cloud – The Official Rackspace Blog". Rackspace.com. Retrieved 2013-06-27.
  37. ^ "The Official Rackspace Blog". Rackspace.com. Retrieved 2013-06-27.
  38. ^ "The Rackspace Cloud Powered By OpenStack". Rackspace. Retrieved 2012-05-24.
  39. ^ Mike W. Thomas, "OpenStack Foundation adds two Rackspace execs to board of directors" San Antonio Business Journal January 20, 2015
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