Rackspace Acquires Mailgun to Help Add Email Services to Web Apps

Rackspace, the web hosting solution provider, today announced that it has acquired developer-focused email services startup Mailgun in a deal the terms of which weren’t disclosed. The acquisition most certainly wasn’t one of the “acqhires” that sees companies acquire a startup for its talent, according to Rackspace SVP of Corporate Development Pat Matthews. Instead, the company will focus on both putting its resources behind building out Mailgun’s existing solutions and working on integrating it into Rackspace’s offerings.

What Mailgun provides is essentially a way for developers to add email services to their web apps (like sign-up or activity notifications, receipts, confirmations and more) in a way that won’t see those emails lost in spam filters and folders. The solution is scalable, and since it’s an API-first offering, highly flexible for developers to work with, unlike some other options that focus more on offering similar tools through a graphic user interface. These kinds of email solutions can be built in-house, but they require a huge amount of initial investment, and ongoing upkeep, including working directly with popular email providers, to make sure that communications stay out of junk mail even when rules and filter procedures change. Hence, handing the task off to a software-as-a-service provider like Mailgun makes a lot of sense, for organizations both big and small.

“Mailgun is really good at making it super simple for developers of web sites and web applications to integrate mail service on the backend, and they’re also really good at managing that email component and making sure they stay off the blacklist,” Matthews explained. “They have relationships with all the big email senders and recipients, and there’s a lot of really complicated software that goes into making that experience easy and manageable for developers.”

The Y Combinator-backed startup will remain in San Francisco, where they’ll join Rackspace’s offices, and Mailgun service will continue uninterrupted for new and existing customers. That includes upcoming deals with server providers like Meteor, which Matthews says will operate essentially as resellers of Mailgun’s offerings. As for how the acquisition will benefit Rackspace customers, Matthews explained that it’s all about giving them access to more of the tools they need to get a full-featured website up and running, with as much functionality as possible coming from a single source.

“Their business is important to Rackspace because all of our customers are hosting websites and building web applications, so part of our goal is to make it really easy for our customers to integrate services like this,” he said. “We want to keep the service running, invest in the surface, add new features over time, but as much as anything we also want to integrate the service with our product portfolio, so that when a Rackspace customer loads up their dashboard and fires up a server they can easily turn on their mail services as well.”

The name of the game in managed hosting is value-add; there are tons of options out there, so aside from basic things like uptime and customer service that already need to be tip-top to even get a player a spot at the table, differentiators come in the form of how easily web developers can do more with built-in tools. Mailgun adds another piece to that puzzle, around an area that every web app needs to address, but that can be challenging to get right without the right kind of help.

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