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Rackspace Added Microsoft Azure to Its Managed Cloud Portfolio

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Aug. 18 2015, Published 3:27 p.m. ET

Rackspace deal with Microsoft’s Azure marks its first to support a public cloud other than its own

In this series, we have discussed Rackspace’s growth and financial performance in fiscal 2Q15. Let’s look at some of the key partnerships it has entered into that could lead to key growth for the company. In July 2015, Rackspace (RAX) announced the launch of “fanatical support” (or support and service) for Microsoft Azure.

Microsoft (MSFT) Azure is a public cloud platform. Public cloud services, as the name implies, are the cloud services provided by the likes of Google (GOOG) to the general public over the Internet. Most of the services available in the public cloud, like applications and storage, are either free or available through a pay-per-use model.

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The alliance between Rackspace and Microsoft is an expansion of the company’s service offering for Microsoft’s product portfolio. This alliance is just a step forward, as Rackspace already supports Microsoft’s Windows Hyper-V Server or Exchange. Also, the alliance marks the first time that Rackspace has offered support for a public cloud other than its own. Rackspace also supports VMware’s (VMW) vCenter and vCloud, which can run in a customer’s or a company’s data centers.

Rackspace and Microsoft Azure alliance is symbiotic

Microsoft hasn’t previously entered into partnerships to expand the presence of its cloud platform, Azure. The alliance will also be Rackspace’s first deal with a leading public cloud provider. Partnering with Microsoft will give Rackspace an edge against leading cloud providers like Amazon’s (AMZN) Amazon Web Services (or AWS). Microsoft, on the other hand, will benefit from Rackspace’s excellent customer service and technology support.

You could consider investing in the iShares US Technology ETF (IYW) to gain exposure to Rackspace. IYW invests about 0.11% of its holdings in Rackspace.

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