GoDaddy sells PlusServer for $456M, kills off its AWS-style cloud services

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As web hosting and domain registration business GoDaddy prepares to report its quarterly results in a couple of weeks, the company is making some moves to reorganise its business.

Earlier this week it confirmed that it would sell its European PlusServer business to London-based private equity firm BC Partners for $456 million (€397 million).

And separately, we have learned that GoDaddy is shutting down Cloud Servers, a business it launched only last year as an AWS-style service for building, testing and scaling cloud solutions on GoDaddy’s infrastructure. We’ve been forwarded a memo about the closure sent to users by GoDaddy and the move is further confirmed by users who are talking about it on Twitter with GoDaddy.

The Cloud Servers memo notes that the service will stop being supported on December 31, 2017. Apps and development environments provided by Bitnami — a YC startup that partnered with GoDaddy to provide a library of some 140 apps that they could host with GoDaddy — will stop being supported on November 15.

“In the coming months, we will be informing you of some exciting opportunities to move your services to other GoDaddy products,” the company notes. “In the meantime, we would encourage you to consider our GoDaddy VPS plans.” It’s not clear whether GoDaddy plans to offer other cloud services down the line — this wouldn’t be the first time that the company has backed out of cloud computing (it pulled out one time before, in 2012) before reentering once more.

We’ve contacted the company for more details.

As some background, the Cloud Servers business was originally launched in March 2016 as a way to offer AWS-style services to GoDaddy’s 17 million hosting customers. The idea was to tap into the recent vogue for cloud services, capturing new business from existing customers who were considering or starting to make early moves into cloud-based apps and services, before they made the leap to AWS, Google, Microsoft or others in the space.

“We’re really about enabling small business to get started and grow,” GoDaddy’s hosting and security SVP Jeff King said to us at the time. “You have a long way to go on GoDaddy’s before you consider bringing your business into a dedicated data center.”

Notably, King quietly left GoDaddy earlier this year and now is in Safety product management at Facebook. Elissa Murphy, who had been the CTO and EVP of Cloud Platform, left only a month after Cloud Servers had launched.

It’s unclear how many companies will be impacted by the decision, and why GoDaddy decided to shut down the Cloud Servers business so soon after launch. The answer may lie in GoDaddy’s acquisition record.

The company has been acquiring businesses in other categories: they have included Sucuri to “enable customers to secure websites without being security experts”; ManageWP and WP Curve for customers to administer sites built on publishing platform WordPress; and FreedomVoice for communications services on websites. All of these point to more features and support of websites themselves rather than a deeper move into cloud apps for businesses.

In the meantime, the PlusServer sale was an expected move: it is a direct result of GoDaddy’s $1.8 billion purchase of competitor Host Europe Group in December 2016, to move deeper into the European market.

“The sale is consistent with the company’s stated intent to explore strategic alternatives for the PlusServer business, which GoDaddy acquired as part of the Host Europe Group (HEG) acquisition,” it noted in its sale announcement. “PlusServer has been treated as an asset for sale since the HEG acquisition closed in April 2017.” As part of the deal, which is expected to close by the end of August, PlusServer is assuming liabilities of €23 million and taking cash of €12 million on its balance sheet. GoDaddy said the proceeds would be used to help pay down a €500 million bridge loan that GoDaddy took to make the HEG acquisition.

The full memo that we were passed about Cloud Services is below:

Thank you for being a valued customer of GoDaddy Cloud Servers. We have made the difficult decision to end of life [sic] the GoDaddy Cloud servers plans on 12/31/2017. Here’s what this means for you:

Bitnami apps and images will stop being supported on 11/15/2017
All other images and servers will stop being supported on 12/31/2017
Prior to these dates, you will still be able to build new servers, test, clone and destroy servers. There are no changes to your billing cycle or billing rate
After these dates, your GoDaddy Cloud Server plan(s) will no longer be accessible.
In the coming months, we will be informing you of some exciting opportunities to move your services to other GoDaddy products. In the meantime, we would encourage you to consider our GoDaddy VPS plans.

Featured Image: Bryce Durbin/TechCrunch