Rackspace, Akamai forge partnership
Rackspace will offer Akamai's technologies—content delivery network services, secure sockets layer and other web optimization tools—as part of its cloud hosting services. — Under the partnership, Rackspace said it will integrate Akamai features in its Cloud Files, an online storage system.
Context & Ripple Effects
The deal lands at an awkward moment for Rackspace. The company went public in late 2009 amid a drought of tech offerings, then spent the following weeks answering reliability questions after repeated outages — including a December 2009 failure that took down numerous major customer websites. Bolting Akamai's delivery layer onto its platform is a direct answer to the performance-and-trust objection hanging over the brand.
For Akamai, the partnership extends a business built on absorbing traffic extremes: the company logged record demand during the November 2008 Obama victory coverage and its busiest tracked day — 11 million visitor requests — on World Cup opening day in June 2010. Reselling that capacity through Rackspace's cloud turns episodic spike-handling into embedded recurring revenue.
First-order effects
- Rackspace customers get CDN delivery, SSL, and web optimization built into Cloud Files and its cloud hosting tiers, removing the need for a separately procured Akamai contract on top of their hosting bill.
- Akamai gains a distribution channel into Rackspace's installed base of cloud-hosted workloads without selling directly to each customer.
Second-order effects
- Competing cloud hosts now face pressure to bundle equivalent edge-delivery and security features themselves, since Rackspace can pitch a single integrated stack against rivals that treat CDN as an add-on.
- The arrangement nudges Akamai further from pure direct enterprise sales toward platform partnerships — pricing leverage shifts toward whichever host controls the customer relationship.
Third-order effects
- If hosting providers keep absorbing specialist web-performance vendors as embedded features, standalone CDN and optimization services risk being repriced from products into line items inside broader cloud bundles — a consolidation dynamic that squeezes smaller specialists hardest.
- Reliability becomes table stakes in cloud marketing: after Rackspace's 2009 outage streak, partnerships like this signal that uptime claims alone won't differentiate hosts; integrated performance guarantees will.
The trend: Cloud hosting platforms are folding specialist web-delivery and optimization services into bundled offerings, converting standalone CDN vendors' capabilities into platform features.