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Rackspace Adds Cloud-Based E-mail with Mailguard Buy
Rackspace Adds Cloud-Based E-mail with Mailguard Buy

By Jennifer LeClaire
August 28, 2012 1:20PM

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Mailgun isn't a consumer play for Rackspace Hosting. It was built for developers. Mailgun offers a set of APIs that lets developers send, receive, and track e-mail from within their applications. Mailgun allows customers to engage their users, and optimize the e-mail capability of their application and Web sites with all the analytics needed to measure the impact.

Rackspace Hosting on Tuesday made a move into the cloud-based e-mail services world. Rackspace announced plans to acquire Mailgun, a Y Combinator startup. Financial terms of the deal were not disclosed.

The Mailgun acquisition comes on the heels of the Rackspace Open Cloud Launch. The hosting company expects the Mailgun buy to drive new revenue streams by making it easy for customers to integrate cloud-based e-mail services into applications and Web sites within minutes. The acquisition is expected to close this week.

"Rackspace is dedicated to providing the tools that our customers need to build their technology stack on the Rackspace Open Cloud," said Pat Matthews, senior vice president of corporate development at Rackspace. "Mail is a core component of nearly every Web site and application today. Our customers are asking for this and Mailgun is the right company to help us deliver it in a tightly integrated way."

Built for Developers

Mailgun isn't a consumer play. It was built for developers. Mailgun offers a set of APIs that lets developers send, receive, and track e-mail from within their applications without managing an e-mail server or becoming an expert in e-mail setup, operations and deliverability.

Mailgun allows customers to engage their users, and optimize the e-mail capability of their application and Web sites with all the analytics and data needed to measure the impact. Mailgun's current client list includes the likes of 37Signals, Parse and Financial Times. Growing by more than 20 percent a month, Mailgun is also integrated into platforms such as Heroku, AppFog and Engine Yard.

Part of the Y Combinator winter 2011 graduating class, Mailgun is headquartered in San Francisco. Y Combinator is a firm that provides seed funding for startups. The Mailgun team will remain in San Francisco.

"Today, e-mail integration into Web apps is as important as your Web site presence itself because it provides the bridge for companies to talk with their customers or the community to talk to each other," said Paul Buchheit, a partner at Y Combinator and the lead developer who created Gmail and a founder of FriendFeed.

Low-Hanging Fruit

Rob Enderle, principal analyst at the Enderle Group, wasn't surprised that Rackspace would make this move now. That's because e-mail is a core cloud service.

"E-mail is the lowest hanging fruit if you are going to provide a cloud service. So it's kind of natural for Rackspace to include this. This allows Rackspace to scale services to areas where they wouldn't typically sell hardware, well down into the low end of the mid-market," Enderle told us.

"It's often risky, though, for a hardware company to drop into services like this because they may find that they are competing with companies they would otherwise sell to that might want to provide the same service."

Tell Us What You Think


John Okada:

Posted: 2012-08-28 @ 7:35pm PT
Looks like Rackspace has been making some moves lately. Seems like a lot of companies are innovating in various ways in the cloud industry. However, the top companies, such as those listed on, will do what it takes to stay ahead of the crowd. Good infrastructure and security are key.

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