Rackspace acquires Jungledisk(blog.jungledisk.com)
blog.jungledisk.com
Rackspace acquires Jungledisk
http://blog.jungledisk.com/2008/10/22/jungle-disk-announcement/
12 comments
They're interested in allowing you to choose your back-end cloud provider (S3 vs Cloud Files)
http://www.jungledisk.com/RackspaceFAQ.aspx
http://www.jungledisk.com/RackspaceFAQ.aspx
Rackspace is on a spending spree :-)
I guess they read Warren Buffet's Times Op-Ed, I hope buying when others are fearful doesn't just apply to stocks.
To be honest, neither of these companies (Slicehost and Jungle Disk) seem like the type that move with the economy. JungleDisk is small enough to be self-funded and Slicehost doesn't seem like the "1. Makesomething, 2. ???, 3 Profit!" type of company. In fact, they both have business models that are perfectly sound and don't rely on things like cornering the market (Twitter, Facebook, etc.). They've just created something of real value that people do pay for.
Buffet's words only ring true when the people who own a company (shareholders) freak out and are worried that the world is coming to an end and will sell for cheap because they think nothing will ever be good again. That doesn't seem like the Jungle Disk or Slicehost folks. Both camps seem really grounded in reality - providing something that's a great value with the fit and polish that just make it a joy to use. And a sound business plan of charging people for stuff. They both know that they can ride out this recession.
I think that Rackspace is more of the scared one in this situation. Amazon is generating a lot of buzz and grabbing a lot of customers with their EC2 service - especially now that they have persistent storage. Rackspace tried their hand at that space with Mosso and, well, failed. The way that Mosso and others (MediaTemple) "automagically" and "infinitely" scale your apps is BS. Likewise, Jungle Disk gives them an opportunity to cut into S3.
Virtualization is a huge threat to Rackspace. Their business was built on reliability. When you can just take Xen snapshots and set an auto-restore to a new box when one fails, why choose Rackspace? Because you have an excess money problem? The cornerstone of their business is starting to matter less for clients. I even convinced my boss to let us try running on EC2 and have a cron job monitor the server, create the snapshots, boot new instances, assign ips, etc, in the case it finds the server down. That's a huge threat to Rackspace.
By buying up these companies, they make sure they're at the head of the space and can create and sell such automated packages to their customers.
Buffet's words only ring true when the people who own a company (shareholders) freak out and are worried that the world is coming to an end and will sell for cheap because they think nothing will ever be good again. That doesn't seem like the Jungle Disk or Slicehost folks. Both camps seem really grounded in reality - providing something that's a great value with the fit and polish that just make it a joy to use. And a sound business plan of charging people for stuff. They both know that they can ride out this recession.
I think that Rackspace is more of the scared one in this situation. Amazon is generating a lot of buzz and grabbing a lot of customers with their EC2 service - especially now that they have persistent storage. Rackspace tried their hand at that space with Mosso and, well, failed. The way that Mosso and others (MediaTemple) "automagically" and "infinitely" scale your apps is BS. Likewise, Jungle Disk gives them an opportunity to cut into S3.
Virtualization is a huge threat to Rackspace. Their business was built on reliability. When you can just take Xen snapshots and set an auto-restore to a new box when one fails, why choose Rackspace? Because you have an excess money problem? The cornerstone of their business is starting to matter less for clients. I even convinced my boss to let us try running on EC2 and have a cron job monitor the server, create the snapshots, boot new instances, assign ips, etc, in the case it finds the server down. That's a huge threat to Rackspace.
By buying up these companies, they make sure they're at the head of the space and can create and sell such automated packages to their customers.
Shouldn't apply just to stocks (Buffet likes to buy companies). But you think startups can be bought at bargain prices right now?
Yes, because the valuations and terms from VCs have already weakened.
Could you estimate the degree?
Even solid socks like Google & MS have taken something like a 40% hit. I assume many smaller public tech companies have taken 50%+ hits.
You think that $X could by you a bigger slice of a startup today then 2 months ago to the degree public companies have?
It's actually an interesting situation for cashed up companies that could use startups if they can get them at the right price. The value of a small company to investors is usually linked to their chances of getting acquired or going public. These are often linked to their chances of getting additional funding along the way. All these are now not decreased (although if you're planning on IPO in 5 yrs, the current state doesn't count for much).
This doesn't apply to acquirors to whom (assumingly) the acquisition has some sort of real value. That real value doesn't have too much with the state of investment markets.
Even solid socks like Google & MS have taken something like a 40% hit. I assume many smaller public tech companies have taken 50%+ hits.
You think that $X could by you a bigger slice of a startup today then 2 months ago to the degree public companies have?
It's actually an interesting situation for cashed up companies that could use startups if they can get them at the right price. The value of a small company to investors is usually linked to their chances of getting acquired or going public. These are often linked to their chances of getting additional funding along the way. All these are now not decreased (although if you're planning on IPO in 5 yrs, the current state doesn't count for much).
This doesn't apply to acquirors to whom (assumingly) the acquisition has some sort of real value. That real value doesn't have too much with the state of investment markets.
No idea on the degree as I was just talking about the general trend not specific numbers.
"You think that $X could by you a bigger slice of a startup today then 2 months ago"
Yes, but I have no idea to what degree (see 1st comment). And with publicly traded companies, just because their stock price is down doesn't mean they aren't sitting on massive cash reserves (e.g. Microsoft) so I wouldn't be surprised to see more acquisitions happen in the near future as companies try to boost sales.
"You think that $X could by you a bigger slice of a startup today then 2 months ago"
Yes, but I have no idea to what degree (see 1st comment). And with publicly traded companies, just because their stock price is down doesn't mean they aren't sitting on massive cash reserves (e.g. Microsoft) so I wouldn't be surprised to see more acquisitions happen in the near future as companies try to boost sales.
they're buying up hosting to compete with amazon, likely.
we use slicehost and really dig it. will this adversely affect our service and pricing? time will tell.
we use slicehost and really dig it. will this adversely affect our service and pricing? time will tell.
> they're buying up hosting to compete with amazon, likely.
Indeed... and to be honest, given what that are buying into, seems like a good execution on that strategy.
Indeed... and to be honest, given what that are buying into, seems like a good execution on that strategy.
I've never been a rackspace fan, since way back in the day. Way expensive and I never liked the managed hosting space. However, I believe the jungle disk and slicehost acquisitions are very smart moves. JD was one of the first (might have been THE first actually) to provide a synch/backup client for S3 when it was introduced. Smart people, good idea, and the technology isn't going away. If they keep the people they'll be an asset. Slicehost has a great image in the hacker community and I love their documentation.
Both companies fit nicely in the cloud space, an VPS is definitely the future. Rackspace is giving an ear to some smart engineers in their camp, which I think is great and kinda googlish. They've got my attention now, for what that's worth.
Both companies fit nicely in the cloud space, an VPS is definitely the future. Rackspace is giving an ear to some smart engineers in their camp, which I think is great and kinda googlish. They've got my attention now, for what that's worth.
I wonder how RS plans to change JD in the future.