CSPs, Mergers and Acquisitions

Managed Cloud Services Acquisition: RapidScale Buys Vonage’s Hosted Infrastructure Services

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RapidScale is acquiring Vonage’s hosted infrastructure services, which includes a mix of managed and cloud services. Financial terms were not disclosed. The deal is expected to close by the end of this month.

The lineup of acquired services includes:

  • Infrastructure as a Service (IaaS)
  • Hosted Exchange
  • Virtual Desktop
  • IT Services
  • Hosted Firewall
  • Backup Services
  • Microsoft Skype for Business

RapidScale, based in Irvine, California, works exclusively through channel partners. The company says the acquisition will expand its footprint on the U.S.  East Coast as it opens an office in Tysons, Virginia and brings on a portion of Vonage’s clients. Customers migrated over from Vonage will gain access to RapidScale’s self-service platform, where they will be able to create new users, new servers, and new desktops, while password resets, usage reporting, event monitoring, and other features can all be continuously available, the company says.

Hosted infrastructure was seen as a low priority for Vonage. Instead, that company has been scooping up competitors like Simple Signal (April 2015) and iCore (August 2015). In June 2016, Vonage acquired API platform Nexmo, which allows companies to program different communication tools like voice and chat into their own applications.

The RapidScale-Vonage deal somewhat resembles other M&A deals in recent months. For instance, Verizon transitioned some of its hosting and cloud services to IBM earlier this year. AT&T has also punted some managed, cloud and hosting services to IBM.

Overall, telco companies seem to be retreating toward network services, essentially exiting cloud services that potentially compete with Amazon Web Services and Microsoft Azure.

Additional insights from Joe Panettieri