How the Channel Fueled Cox’s Acquisition of RapidScale

Executives of the newly married Cox and RapidScale aim to create a cloud computing powerhouse.

Cox Business announced last week that it bought RapidScale for an undisclosed sum. Buying the cloud provider solidifies the cable company’s journey into IT and managed services.

Steve Rowley, executive vice president of Cox Business, tells Channel Partners that customer feedback led to the transaction.

Cox’s Steve Rowley

“The demand and appetite from our customers as of late has really pushed us into looking to more and more cloud application services. There’s a push from our customers to drive in that area and to get into an environment where we’ve got proactive managed services and are providing applications and services that meet their needs.”

Cox has a business customer base of more than 400,000, many of which are SMBs. We noted last month, however, that Cox has been adding businesses of larger sizes to its customer list. Rowley says about 75 percent of his company’s business customer base is SMB, but Cox has also attracted larger clients from verticals like health care, hospitality and finance. And it’s the addition of RapidScale’s managed cloud services that he says will expand Cox’s reputation as a trusted technology adviser.

“It’s the IT space that our customers are spending dollars and wallet share on today, and it’s going to allow us to offer a larger breadth of services with the RapidScale acquisition,” Rowley said.

RapidScale CEO Randy Jeter tells Channel Partners that the two organizations had been working together prior to the acquisition for more than a year and a half and acquired their first joint client about six months ago. Rowley says Cox admired RapidScale’s culture, in addition to its expertise and resources. That bullishness is one of the reasons RapidScale is going to maintain its structure after the acquisition. It will be part of the Cox New Business Ventures unit, which also houses the recently acquired Blueprint RF.

Celebrating our first day as part of the @coxbusiness family! pic.twitter.com/zhImOerqPc

— RapidScale (@Rapid_Scale) August 9, 2018

Jeter says Cox brings the necessary capital and support to build “the future of managed cloud services.”

RapidScale’s Randy Jeter

“They’re bringing in one of the most powerful networks. When you look at Cox long-term, they want to have a cloud pillar as part of their entire strategy,” Jeter said. “I think any powerhouse, $20 billion, family-owned company that’s not public that is looking at building pillars long-term — wants to find a partner to do that with.”

Cox brings transport and connectivity to the table, and RapidScale offers its own global cloud platform.

“It was a perfect fit in that we built a service provider business around IT on our compute with the margin and the growth necessary to attract Cox to the table to say, ‘We like your model. We want your model. Let’s build together,'” he said.

Jeter says Cox has been very supportive of…