As someone who's first VPS was from Slicehost: Oh, not this again.
Apollo Global is buying Rackspace for $4.3B
81–90 of 167 posts
Re: Apollo Global is buying Rackspace for $4.3B
#82Is the playbook "Financial engineering, and decrease support for existing customers"? (Financial engineering meaning load up on debt, where interest payments can be written down)
Re: Apollo Global is buying Rackspace for $4.3B
#83Earlier quoted context omitted.
Off topic, but can you tell me more about the issue with being taken over by a private equity firm? I work for a 10k employee company who will be taken off stock exchange and sold to a Chinese equity firm.
Besides cost cutting via layoffs being a favored (although by no means the only) strategy for PE firms, there's also debt servicing. Typically, PE companies buy the company while only putting down a small portion of the purchasing price. They finance the rest through banks. The whole concept is pretty similar to buying a house with a mortgage, except you're buying a company. The debt payments are then a tax write-off…
Nice explanation.
What if the people that got the mortgage for the house just want to make it pretty an resell it? I guess that's the fear here, when the buyer is an investment company (house flipper) and not a technology company that wants to increase their market share or add technology / talent to their portfolio.
Re: Apollo Global is buying Rackspace for $4.3B
#84Earlier quoted context omitted.
Off topic, but can you tell me more about the issue with being taken over by a private equity firm? I work for a 10k employee company who will be taken off stock exchange and sold to a Chinese equity firm.
Besides cost cutting via layoffs being a favored (although by no means the only) strategy for PE firms, there's also debt servicing. Typically, PE companies buy the company while only putting down a small portion of the purchasing price. They finance the rest through banks. The whole concept is pretty similar to buying a house with a mortgage, except you're buying a company. The debt payments are then a tax write-off…
Thanks for the insightful explanation!
What do PE companies do with more than one company with kind of dated offerings in the same/similar niche?
Reduce the fat, merge them and sell them to a large company?
E.g. Qlik, Riverbed and Dynatrace https://thomabravo.com/portfolio/all/current/
Re: Apollo Global is buying Rackspace for $4.3B
#85I guess it was only a matter of time before they got bought out. It's tough to compete against one of Google, Amazon or Microsoft, competing against all 3 at the same time in an area that all three consider to be core to their future must just be cut throat! It's never great for a companies employee's to be taken over by a private equity firm, if you actually find someone whose had a good experience then please let m…
Off topic, but can you tell me more about the issue with being taken over by a private equity firm? I work for a 10k employee company who will be taken off stock exchange and sold to a Chinese equity firm.
The NYT did a good piece a few years back on how private equity firms totally destroyed Simmons, a mattress company:
http://www.nytimes.com/2009/10/05/business/economy/05simmons...
Basically, in theory the best way to make money is to serve your customers well. But in practice, financial engineering creates a lot of opportunities where those diverge. This is hard on employees, who value non-financial things like stability and meaning in their work.
Re: Apollo Global is buying Rackspace for $4.3B
#86I guess it was only a matter of time before they got bought out. It's tough to compete against one of Google, Amazon or Microsoft, competing against all 3 at the same time in an area that all three consider to be core to their future must just be cut throat! It's never great for a companies employee's to be taken over by a private equity firm, if you actually find someone whose had a good experience then please let m…
Isn't this deal similar to Dell going private?
I can certainly imagine how it might not end well for a company that gets taken private, but I also think that trying to innovate and grow in such a competitive environment would be even harder if you have to worry about shareholders breathing down your neck.
Re: Apollo Global is buying Rackspace for $4.3B
#87Earlier quoted context omitted.
Off topic, but can you tell me more about the issue with being taken over by a private equity firm? I work for a 10k employee company who will be taken off stock exchange and sold to a Chinese equity firm.
Look up the terms "profit center" and "cost center". As soon as you hear your area being described as a "cost center", start looking for another job.
It's such a great example of how accounting drives insane decisions. I will die happy if I can get people to stop thinking in terms of profit vs cost and instead think in terms of value and waste, as the Lean Manufacturing people do.
Re: Apollo Global is buying Rackspace for $4.3B
#88I'm praying that Mailgun doesn't get affected by this, they're absolutely awesome for the small shops like me (and easy to integrate).
Oh Yikes, totally forgot Mailgun is owned by RS. I have a few things using the Mailgun API too. I am hesitant to move to Sendgrid with what happened a couple of weeks ago and how they handled the outrage.
At this point, I may just setup & manage my own box for email again. It is a real PITA but I just don't have a lot of faith in these 3rd party API's anymore.
Re: Apollo Global is buying Rackspace for $4.3B
#89I wonder if this will mean an influx of capital in the Austin/SA area.
Re: Apollo Global is buying Rackspace for $4.3B
#90Earlier quoted context omitted.
Yes but even prior to this, Rackspace had been a managed cloud provider, meaning they offer services on top of the infrastructure. This is different than AWS.
RAX has its roots in managed cloud, but they moved away from that. They got into IaaS, but have retrenched. Here's RAX's mapping of AWS to RAX P&S for IaaS [0]. That's a lot. RAX has decided to return to its roots (managed cloud) and seek differentiation because it can't compete on IaaS.[1] That'll be tough. RAX's going private to shift its P&S mix and turn things around. edit: I'll also point to jsode's great commen…
Rackspace's IaaS offering was never close to what AWS, Azure or even GCE offer.
It was more similar to DigitalOcean or Vultr, who are not really IaaS but VPS providers. I mean, where are the VPCs? the incredibly redundant load balancing? the VPN gateways, etc?
Disclaimer: It has been 2 years since I evaluated RAX's offerings.