Rackspace Must Balance Partner Program, Cloud Funding Activities

When it comes to Rackspace (NYSE: RAX) the managed cloud services provider's business and partner program are anything but traditional. Among the developments channel partners should closely watch: Rackspace continues to fund a third-party MSP even as the company builds its own partner program.

As you may recall, Apollo Global is acquiring Rackspace as part of a $4.3 billion private equity buyout. The move will allow Rackspace to build its managed services practices for Amazon Web Services, Microsoft Azure and other clouds -- without having to worry about Wall Street's earnings-per-share demands every 90 days.

Frankly, I believe the deal is a good move for Rackspace, along with the hosting provider's partners and customers.

Rackspace Continues Cloud Technology Partners (CTP) Investments

Now here's a rather interesting twist: Rackspace also continues to make its own venture capital investments. For instance, the company participated in a Series C funding round for Cloud Technology Partners (CTP) -- though I don't know if a funding figure was disclosed.

Rackspace also participated in an earlier CTP funding round. CTP will use the latest influx of money to address four key priorities:

  1. Expanding the Cloud Adoption Program for customer deployments;
  2. expanding CTP's Digital Innovation Practice, which includes IoT, big data, machine learning, blockchain and other emerging technologies;
  3. building CTP's Managed Services Capabilities -- which includes a close working relationship with Rackspace; and
  4. expanding CTP's Sales & Delivery Teams.

No doubt, CTP could be a valuable partner -- assisting end-customers that want to leverage Rackspace's fanatical support and related services. But Rackspace will also need to make sure that the CTP effort doesn't conflict with Rackspace's own channel partner program.

We'll be watching to see how that plays out.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.