Cox, RapidScale To 'Triple' Hybrid Managed Cloud Revenues Together

Cox Business is set to aggressively grow the reach of its channel program, as well as its managed services portfolio, with the help of RapidScale, executives for both companies told CRN.

Cox Business, the commercial division of Cox Communications, announced last Thursday it had acquired cloud service provider RapidScale. The companies together will offer connectivity paired with RapidScale's hybrid managed cloud offerings for business customers through the channel.

Randy Jeter, co-founder and CEO of RapidScale, a provider that does 100 percent of its business through the channel, said that one reason Cox chose his company is because the telco needed a national team.

[Related: 18 Service Providers That Want To Work With The Channel]

"Cox really admired the channel presence and relationships we had, and the knowledge on how to be profitable as a channel-based cloud company," Jeter said. "Cox is coming out of its regional approach with their sales and channel teams, and it's about expanding that footprint."

Jeter is staying on as CEO of RapidScale, which will operate with Cox Business' New Business Ventures segment, a group of six high-growth portfolio companies within Cox Business.

Intelisys, a Petaluma, Calif.-based master agent is a partner to both Cox and RapidScale. Both providers have proven their commitment to the channel, and the combination will give Cox a "solutions-oriented story" coupled with a nationwide footprint, said Andrew Pryfogle, senior vice president of cloud transformation for Intelisys.

"Where Cox has always been somewhat restricted by their cable or fiber footprint, RapidScale can deliver their services anywhere, so I think this really helps strengthen the out-of-market story for Cox," he said.

Cox already offered managed security, WiFi, and router services, but the combination will add new services, such as managed desktop and email. For RapidScale, Cox is ready to use its healthy balance sheet to invest in the cloud service provider to grow that business faster, said Steve Rowley, executive vice president of Cox Business.

The Cox Business segment today generates more than $2 billion in annual revenue.

"Over the next four years, RapidScale will more than triple its revenue through the channel," Jeter said.

Via the acquisition, Atlanta-based Cox will be able shift away from the commoditized connectivity market and into the managed cloud arena, which will allow the 120-year-old carrier to differentiate, Pryfogle said.

"This will let [Cox] have far more interesting conversations with customers, and frankly, will allow them to move upmarket into bigger deals, and that will be very welcome news to partners," he said.

Cox sees hybrid cloud and managed services as its next move because that's what its customers are looking for, Rowley said.

"We have over 400,000 customers within Cox Business, and they need efficient solutions and capabilities to help them stay productive," Rowley said. "I view managed cloud services as a gateway for those customers to have quicker access to the applications they need."

Last August, Cox acquired managed network solutions provider Blueprint RF, which also joined its New Business Ventures segment.

RapidScale's team, which is staying in place within Cox Business, understands the cloud and the channel, so the two companies will be great strategic partners for each other, Intelisys' Pryfogle said.

"I'm a fan of this [deal] because what it should result in is RapidScale being able to hire more people and build out their channel support model more aggressively," he said.