Rackspace Acquires JungleDisk, Slicehost

Flush with cash, Rackspace (RAX) has decided to both buy and build as it seeks to expand its beachhead in cloud computing. The San Antonio managed hosting company said today that it has acquired online backup company JungleDisk and developer-focused virtual machine hoster Slicehost to hasten its expansion into the cloud. Rackspace's combined cost for the two acquisitions is $11.5 million, payable in cash and stock, with a potential earn-out of up to $16.5 million based on performance.

On the build side, Rackspace will rebrand the two cloud services it developed in house, and integrate its new acquisitions and third-party providers into its new suite of cloud offerings under Mosso, its cloud hosting unit. Here's the details Rackspace announced today:  

"Our new offerings are part of a strategy to bring cloud benefits to all businesses with simple, cost-effective products that everyone can use, backed by the best customer support that only Rackspace can deliver," said Rackspace CEO Lanham Napier.

“Cloud computing offers tremendous benefits to our customers that complement our traditional managed hosting services,” said Napier. “Being a leader in hosting means being a leader in the cloud. Today, we made clear our intent to have the best suite of cloud offerings.”

Slicehost specializes in Xen-based virtual machine hosting similar in concept to Amazon's EC2 utility compute solution, and has more than 15,000 “slices” running on its infrastructure. Jungle Disk offers cloud storage solutions that allow users to share an unlimited amount of cloud storage between multiple users through a secure, mountable network drive and automatic backup.

Rackspace said that Slicehost and JungleDisk will be integrated into the Rackspace cloud portfolio over time.

“On-demand computing is the new foundation of hosting,” said Jason Seats, the founder of Slicehost. “Rackspace gives us the ability to expand the Slicehost offer and meet the needs of the corporate world whose interest in cloud technologies has only just begun.”

“Rackspace is a natural fit for the next evolution of Jungle Disk,” said Dave Wright, CEO and founder, Jungle Disk. “We are creating a set of storage solutions that will help solve rapidly-growing storage problems for businesses. We believe that no one could take this solution to the business world better than Rackspace. Together we will push the cloud revolution and make simple and cost effective storage solutions available to businesses of all sizes.”