Rackspace Turns Focus to Managed Services

Rackspace has established itself as one of the leading providers of cloud-based services, but recently has been making moves to expand its market presence into managed services as well. The company has announced that it has acquired TriCore Solutions, a software developer specializing in application management. This deal is being touted by Rackspace as the largest in the company’s history, though specific financial details have not yet been revealed.

TriCore was an especially attractive purchase by Rackspace in light of recent demands from customers. In moving from an Internet hosting service to become more of a managed services provider, Rackspace will have to deal with business aspects that were never even dreamed of in its original business plan, including supply chain management, manufacturing, and customer service. The managed applications software developed by TriCore (with input from tech giants like Oracle and SAP) will help control and manage these vital functions, allowing Rackspace to expand its presence beyond just the Internet realm. This should be music to the ears of Rackspace customers, as this pivot is reportedly something they have been clamoring for for a long time.

“Our customers are asking us to move further ‘up the stack’ by expanding our managed application capabilities,” Rackspace President and interim CEO Jeff Cotton said. “TriCore's services are among the best in that space and are highly complementary to ours. They will help enable us to deliver more of the services that our existing customers need, while opening the door to new opportunities across the globe.”

Rackspace has already carved out a successful platform for itself in the Internet hosting business, but the fact that it is also pursuing this pivot shows that it is neither satisfied nor complacent. The leadership at Rackspace is clearly forward thinking, looking for ways that it can improve its business model and become a more multifaceted company. The acquisition of TriCore Solutions and the continued pivot towards managed solutions shows that it is looking for ways to become more versatile for the future.