Rackspace Adds Board Member With SaaS Background

Rackspace has appointed Kevin Costello, a veteran of the cloud software business, to join its board of directors, the company said Tuesday.

Costello will take his seat as a Rackspace director at the end of a roller-coaster year for the San Antonio-based server and cloud hosting provider. Earlier this year, Rackspace hired Morgan Stanley to evaluate potential mergers and acquisitions, then, after a firestorm of speculation as to potential buyers, the company declared it would remain independent.

Since then, Rackspace has been reordering its leadership, including replacing Graham Weston with Taylor Rhodes as CEO. Both Weston and Rhodes will be Costello's fellow board members.

[Related: Rackspace Consolidates SaaS Offerings Into Single Business Unit]

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Costello comes to Rackspace from Ariba, a business software vendor that pioneered SaaS solutions for helping companies with procurement and spend-management activities.

For six years, Costello served as Ariba's president. The company was acquired by SAP for $4.3 billion in 2012, and after the acquisition Costello's focus was on bringing Ariba's technology to market through SAP's channels.

Before joining Ariba, Costello worked for 18 years at Andersen Business Consulting, where he held several senior management positions.

Rackspace, primarily thought of as an IaaS vendor, offers several SaaS products, from hosted Exchange email, to backup and online storage solutions and Microsoft collaboration tools. Those offerings were only recently consolidated into a single SaaS business unit within the company.

After a tumultuous year, Rackspace is busy trying to differentiate itself by its managed cloud strategy and Fanatical Support service offering.

Lane Campbell, CEO of Syntress SCDT, a Rackspace channel partner based in Chicago, told CRN that Costello's history with Ariba bodes well for Rackspace and its channel.

"I'm excited that Rackspace has brought some proven talent to their board. Ariba changed the way companies compete for business," Campbell said, referring to Ariba's unique system of aggregating open purchase orders and then allowing resellers to submit bids trying to win the business. That innovative approach creates a stable supply of leads for vendors while simplifying the vetting process for customers, he said.

In a prepared statement, Weston, who serves as the board's chairman, said Costello's presence on the board will help the company advance the strategy it has implemented to differentiate itself in a competitive cloud field.

"Kevin is a highly regarded and capable leader in the SaaS space who brings more than 25 years of consulting and advisory experience. He has helped numerous companies improve their competitive position through technology, strategy and services," Weston said.