Amazon said to be in talks to invest in US cloud services company Rackspace
- Rackspace leases server space and helps corporations store and access data in the cloud
Amazon.com is in preliminary talks to invest in US cloud services provider Rackspace Technology, people familiar with the discussion said on Monday.
The deal would involve Amazon acquiring a minority stake in Rackspace, the sources said. Rackspace helps companies migrate their data to Amazon Web Services, and the investment would strengthen the ties between the two companies. Rackspace also migrates companies to Alphabet’s Google Cloud, Microsoft Corp’s Azure and VMware Inc.
There is no certainty that Amazon and Rackspace, which is majority-owned by private equity firm Apollo Global Management, will agree a deal, the sources said. If there is one, it could take one to two months to negotiate it, the sourced added, asking anonymity because the matter is confidential.
Rackspace and Apollo declined to comment, while Amazon did not respond to a request for comment.
Rackspace leases server space and helps corporations store and access data in the cloud. It was acquired by Apollo in a leveraged buyout in 2016, and was listed in the stock market earlier this month. The San Antonio, Texas-based company has a market capitalisation of more than US$3 billion, almost as much as its debt pile.
Amazon’s cloud services is thriving on higher demand from companies switching to virtual offices amid the coronavirus outbreak. Its revenue from Amazon Web Services, which sells data storage and computing power in the cloud, rose nearly 29 per cent in the second quarter to US$10.81 billion.