Report: CenturyLink interested in buying Rackspace

Rackspace is rumored to be available for purchase

In May news surfaced that Rackspace had hired an investment banking firm to evaluate options for the company, including a possible sale. Now, reports indicate that CenturyLink may be interested.

Bloomberg reported today that CenturyLink is “seeking to acquire” Rackspace, citing “people familiar with the situation.” There has been no official word from Rackspace or CenturyLink about the reports - spokespeople for each company declined to comment, but typically businesses do not discuss merger and acquisition rumors before they are announced publicly.

Southern telecommunications provider CenturyLink has made a number of moves in the past few years to position itself as a player in the IaaS cloud computing market beyond its work as a network services provider. Most notable was the company’s acquisition of managed hosting and IaaS cloud provider Savvis for $2.5 billion in 2011. CenturyLink and fellow teleco Verizon are each looking to use their broad domestic network footprints to build up an IaaS empire. It’s a play many teleco companies are doing. Verizon bought Terremark for $1.4 billion that same year to build out its cloud. Rackspace is known for being a managed hosting and cloud company with a specific focus on delivering services based on OpenStack.

Stay tuned to Network World and Cloud Chronicles if there is any official announcement.

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