Why Liquid Web Acquired Rackspace’s Cloud Sites Platform

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Rackspace’s change in direction, which puts a heavier emphasis on managed support for third-party clouds, has helped one web hosting provider double down on its efforts to serve the burgeoning web professional market.

Liquid Web, the Michigan-based web host that acquired Rackspace’s Cloud Sites platform earlier this week, said the platform as a service (PaaS) will support its strategy on growing its offerings for web-dependent professionals – developers, designers, and agencies who spend hundreds to thousands of dollars per month on hosting services, have revenue of less than $10 million, and rely on hosting providers to be their outsourced system operations team.

READ MORE: Rackspace in Acquisition Talks with Private Equity Firm: Report

These customers are not a new target for Liquid Web, but it is an area where it sees significant opportunity for growth – now, of course, helped along by the new technology and team it has inherited from Rackspace.

“We realized that a significant amount of the workloads we were running at Liquid Web were WordPress,” Liquid Web CEO Jim Geiger said in an interview with The WHIR. “[We] determined that the strategy going forward would be to complement that movement and we believed we needed a platform as a service for expanding the market.”

Geiger joined Liquid Web last year as part of an investment from Madison Dearborn Partners, succeeding Liquid Web founder Matthew Hill as CEO.

In this space, Liquid Web will continue to compete with companies like WPengine, and FlyWheel, which offer a more premium hosted WordPress offering targeted at these same types of customers.

Joe Oesterling, Liquid Web COO, said that the need for a platform supports the overall trend in the hosting market towards simplification, or the “SaaSification” of the marketplace.

“About ten years ago the majority of sites were developed and now they’re designed using tools like WordPress, so what you’re seeing is a newer generation of web creation professional that really doesn’t want to log on to a server: they really want to have a partner that provides products and, more importantly, support that extracts them from that,” Oesterling said.

“What we really liked about the Cloud Sites platform is that it was a platform – it didn’t require the customer to know how to log on to the server at the command line or to use a control panel like cPanel or Plesk to actually interact with the server,” he added.

As part of the acquisition, Rackspace’s Cloud Sites team will join Liquid Web and stay in San Antonio.

“The entire team including their leadership have been in place for many years,” Geiger says, noting the similarity in cultures could be in part why Rackspace chose Liquid Web to be the recipient of its Cloud Sites asset.

“One of the things that we’re finding quite amazing is we have a very common culture with the Racksace company. I’ve admired it personally from afar and it’s a very purpose-driven culture and customer-centric culture,” he says.

Geiger is quick to point out that Liquid Web is focused on ensuring a good experience for these customers.

“We’re not changing any pricing or packaging,” he says.

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One Comment

  1. I support this move by Liquidweb because I'm LiquidWeb hosting for developing new apps. It will be great move developers like me.

    Reply