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What Rackspace gets with management tool maker Cloudkick

Prominent cloud provider Rackspace shelled out for management startup Cloudkick, ensuring that its hosting platform will possess top cloud technologies as the market matures.

Weekly cloud computing update

Number two cloud provider Rackspace has acquired cloud management platform service Cloudkick, a formidable addition to its product lineup. It's a move that highlights how young the cloud computing market is in many ways, along with emphasizing some of cloud's odd contradictions for the traditional hosting and IT technology markets.

It's likely that Rackspace views this as a way to pick up new technology quickly.

Cloudkick lets customers sign up and manage their cloud environments within a Web portal; its nearest competitor is RightScale. Cloud management tools and services are agnostic as to which cloud service you use; feel free to choose between Rackspace, Amazon Web Services, GoGrid, Linode or others. It's purely for Infrastructure as a Service, and its users tend to be Web-based or high-tech firms. National Instruments is a customer; so is media group EMI. And Rackspace has already made a point to note that it will not significantly alter the "all clouds welcome here" model.

"It will be business as usual for current Cloudkick customers. They will continue to receive support and services on all Cloudkick-supported clouds. And that's not going to change," said Pat Matthews, vice president at Rackspace, in an email.

Matthews said Rackspace was buying Cloudkick in order to take advantage of the slick toolset and interface that Cloudkick offered. Rackspace Cloud (which has its own, considerably less comprehensive Web management console) will integrate Cloudkick tools and features over time.

Analyzing Rackspace's motivation
So why would Rackspace buy a service that essentially encourages developers and IT pros to use the competition? It could be an Oracle-ish type of move, designed to quash an upstart, but Rackspace says it is keeping the doors open on Cloudkick. It's more likely that Rackspace simply has supreme confidence in its hosting business and views this as a way to pick up new technology quickly. After all, cloud computing is still, and will remain, a small part of the IT business for quite some time.

It will be business as usual for current Cloudkick customers.


Pat Matthews, vice president at Rackspace

According to its Q3 2010 report, cloud services are a fast growing and popular part of its overall revenue. However, they're still less than 20% of its revenue -- Rackspace made $26.8 million on cloud and $172 million on dedicated hosting in the last quarter. The company feels like it has plenty of wiggle room on its cloud business, and the same can also be said of Amazon, which makes an even smaller percentage of its money on cloud and rolls out updates at a breathtaking pace.

Rackspace has also announced a managed cloud offering and a hybrid option for dedicated hosting customers that want to use Rackspace Cloud but can't afford the exposure, along with continuing to actively develop OpenStack, a free cloud platform developed in conjunction with NASA.

That's why Rackspace doesn't care that much, even though most of Cloudkick's users may never spend a cent on Rackspace services; the technological benefits far outweigh the minor amount of cash it could be making. This buy is certainly exciting for Cloudkick, which has seen a lot of Ramen noodles and late nights vindicated, but what it really means is that cloud computing is barely out of the gate.

Carl Brooks is the Senior Technology Writer at Contact him at

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