Is RackSpace’s acquisition of CloudKick one big competitive intelligence coup?

I’ve been wondering why RackSpace acquired CloudKick (see RWW for a good overview of the announcement). CloudKick provides monitoring and performance measurements of your servers and cloud instances.

I doubt the acquisition has been made to bolster RackSpace’s own internal monitoring because the company would already have a very mature solution for that by now.

My concern is that RackSpace has acquired the company to be able to obtain, essentially by the back-door, performance and metric data of the servers running on RackSpace’s competitors. Given that CloudKick is geared up to predominantly monitor servers on Amazon EC2, GoGrid, Linode, RackSpace and SliceHost (which is also owned by RackSpace) it doesn’t sit well that suddenly one of the biggest vendors in there would suddenly be monitoring your server operated by one of the competitive vendors in that list.

This is always a problem when a company is purchased by one of the vendors it sits above in the value chain, esp when impartiality and independence is important in a space such as vendor monitoring.

The CloudKick Agent that you install on your server to log the data and send it back to CloudKick (now RackSpace) streams some pretty all-encompassing data about your server. There is no doubt in my mind that the competitive intelligence RackSpace can obtain from this is massive. And if I’m right, expect to see the price of CloudKick to drop and/or the free option to offer greater allowances in order for RackSpace to maximize the amount of data it can obtain.

While it looks on the surface that RackSpace made a smart move by obtaining CloudKick’s userbase (including Fortune 1000 companies), the question remains whether those customers will stay knowing that their data is being monitored by a big player like RackSpace. And further more whether the vendors themselves will be happy that large amounts of data in aggregate is being obtained by a competitor – I can see Amazon being particularly vulnerable and concerned here.

(this post is an elaboration of a comment I made to this effect on Hacker News)