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GoDaddy Shuts Down Cloud Server Business, Sells Off PlusServer Managed Hosting

GoDaddy's Raghu Murthi

GoDaddy’s Raghu Murthi

GoDaddy is shutting down Cloud Servers, the AWS-style cloud computing business it launched just last year for SMBs.

TechCrunch broke the news, and GoDaddy confirmed the decision to ChannelE2E Friday, releasing this statement from Raghu Murthi, senior vice president of Hosting and Pro:

“After serious consideration, we have decided to end-of-life our cloud servers’ product. Our goal from the beginning was to create simple and scalable services for small and medium business owners. We’re proud of what we built and now we are focusing on building a robust and scalable solutions based on OpenStack infrastructure. GoDaddy Cloud Servers provided numerous learnings for us that we’ve already been applying to other products and services. Thanks to the partners and, most importantly, the customers who used it.”

Meanwhile, GoDaddy has announced an agreement to sell its PlusServer managed hosting business to a private equity firm for $456 million. Pending regulatory approval, the deal should close in August.

This move is not a surprise: GoDaddy has been public about its intentions to sell the line of business, which it acquired as part of the Host Europe Group (HEG) acquisition that closed in April.

Focus on SMBs Without Challenging AWS, Azure

Both decisions fall in line with GoDaddy’s overarching strategy to support small- and medium-sized businesses and application developers without necessarily taking on cloud computing giants like Amazon Web Services (AWS) and Microsoft Azure.

GoDaddy did not distribute a press release announcing the Cloud Servers decision, but it did notify customers by email, TechCrunch reported. The message said the service will stop being supported December 31.

“In the coming months, we will be informing you of some exciting opportunities to move your services to other GoDaddy products,” the email said. “In the meantime, we would encourage you to consider our GoDaddy VPS plans.”

Also according to TechCrunch, 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.

The PlusServer business is being purchased by London-based private equity firm BC Partners. GoDaddy plans to use proceeds from the sale, along with cash on hand, to pay a bridge loan of more than $650 million.

Recent GoDaddy Acquisitions

GoDaddy’s $1.79 billion acquisition of HEG expanded the company’s push into small business hosting across the globe.

HEG had been the largest privately-owned web services provider in Europe, supporting small businesses and web experts. The company served 1.7 million customers ahead of the sale.

GoDaddy has also made a deeper push into WordPress managed services and accelerating its channel partner program efforts. In March, it purchased WordPress security vendor Sucuri for an undisclosed sum.

In May 2016, GoDaddy acquired FreedomVoice, a key provider of cloud-based VoIP phone systems that serves nearly 40,000 customers across the United States, for $42 million in cash plus up to $5 million in future payments. The move was part of a larger telephony push at GoDaddy, following the creation of a telephony business unit.

Millions of companies use GoDaddy to host their domains, and the company has expanded international business to at least 56 markets over the last four years.

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