Apollo Agrees to Buy Rackspace in $4.3 Billion Deal

Rackspace, an early player in the cloud market, is being acquired by Apollo, a PE firm, at a 30% premium. Despite its early success, Rackspace struggled to compete with giants like Amazon and Microsoft due to their scale and pricing strategies. Over the years, Rackspace has shifted its focus from direct competition to managing cloud services. Going private may aid this transition. Rackspace remains a second-tier player, unable to match the scale of Amazon, Microsoft, and Google, who benefit from economies of scale. The acquisition may provide Rackspace with a better chance to adapt and grow in a private setting.

Who is the private equity firm that wants to buy Rackspace?

What challenges has Rackspace faced in competing with larger companies like Amazon and Microsoft?

How did Rackspace's pricing strategy change in 2013?

What significant business transition has Rackspace been working on?

What is the current position of Rackspace in the cloud service hierarchy?