(Reuters) – Amazon. com Inc is in preliminary talks to invest in U. S. cloud services provider Rackspace Technology Inc, people familiar with the discussion said on Monday.
There is no certainty that Amazon and Rackspace, which is majority-owned by private equity firm Apollo Global Management Inc, will agree a deal, the sources said.
If Rackspace bring in Amazon as an investor, it would be the second Apollo-owned company to secure such a deal with a major technology company this year.
Rackspace helps companies migrate their data to Amazon Web Services, and the investment would strengthen the ties between the two companies.
Its revenue from Amazon Web Services, which sells data storage and computing power in the cloud, rose nearly 29% in the second quarter to $10. 81 billion.
The deal would involve Amazon acquiring a minority stake in Rackspace, the sources said.
Rackspace also migrates companies to Alphabet Inc’s Google Cloud, Microsoft Corp’s Azure and VMware Inc.
Apollo had acquired ADT in a nearly $7 billion deal in 2016, and still owns a majority stake in the company.
Rackspace and Apollo declined to comment, while Amazon did not respond to a request for comment.
Rackspace leases server space and helps corporations store and access data in the cloud.
Earlier this month, Google revealed it had picked up a 6. 6% stake in ADT Inc for $450 million, betting on the home security company’s strong customer base and an army of technicians to drive sales of its Nest devices.
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