Rackspace announced today it was purchasing TriCore, giving it an enterprise applications management play to go along with its cloud management services.
The announcement comes just one day after the company announced it was bringing a new CEO onboard, make it a busy week for the firm.
The companies did not share the terms of the deal, but Rackspace called it the largest acquisition in company history. To this point, it had acquired 8 companies, none since 2013 according to Crunchbase data.
The move gives Rackspace the ability to not only manage a company’s cloud services, but also move up the stack and begin managing complex applications from large enterprise software companies like Oracle or SAP, something Rackspace says customers have been asking for increasingly.
It also means that the company can move away from competing directly with public cloud providers, which is rapidly becoming a no-win proposition, Ted Chamberlin, an analyst for Gartner who covers cloud service providers told TechCrunch. Grabbing TriCore will give Rackspace access to new markets inside companies that don’t compete directly with the big infrastructure vendors.
“It’s evident that Rackspace, as well as most other IaaS providers, just can’t compete with the scale, pricing and rapid product development of AWS, Azure and Google Cloud. TriCore helps them get to more on-premise workloads for mid-to-large enterprises, an area that Google and AWS won’t touch,” he explained.
It also could give Rackspace deeper access inside large organizations beyond IT into business units. “They no longer are selling commoditized infrastructure capacity; they now can sell to the lines of businesses and support the core ERP applications like SAP, Oracle and JD Edwards that run entire companies,” Chamberlin said.
TriCore, a Norwell, Massachusetts-based company has been around since 1999 and boasts over 500 employees. It appears TriCore will be for the most part continuing to operate on its own while working together with Rackspace on cross-sales opportunities where it makes sense.
TriCore brings with it 275 customers and can work with customers on any infrastructure whether in the public cloud, a private datacenter, TriCore’s own datacenter or a co-location facility.
The deal is expected to close in June.