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July 2, 2014

Rackspace could go private, claims insider source

IT hosting giant reportedly in talks with private equity firm.

By Ben Sullivan

Cloud hoster Rackspace may go private and is currently talking with a private equity firm to help fund the deal.

Tech website TechCrunch, which reported the news, said that an announcement of the deal may come this week.

A source in Rackspace told TechCrunch: "The pressures of being a public company are too much."

Rackspace is a hosting services provider, which provides public cloud, private cloud and managed hosting.

The firm faces hard competition from the likes of Amazon Web Services, Microsoft Azure and Google Cloud, all of which have been persistently cutting prices of their services in recent months.

Rackspace has just come out of a number of acquisition bids, with offers from companies such as IBM and HP. TechCrunch’s source claimed that the offer from IBM fell through – something that IBM has yet to confirm.

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Rackspace has recently been touting its OpenStack open source platform that puts the firm in a better position to take on competitors such as Amazon. The open source solutions cover a range of IaaS products and enable a situation where fewer engineers and lesser costs are needed, allowing Rackspace to focus more of its budget on support.

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