Rackspace Buys Server Management Platform Cloudkick (YC W09)
This is nothing against cloudkick.  I've never even been to their site.  I'm sure their service is amazing.  My question is a general question that I ask almost every time I see a company get bought.<p>The question is, "Why buy, when you can build?"<p>Let's say I'm Rackspace.  I have a cloudkick account that I used when I was evaluating them to see if I wanted to buy them.  I know exactly what they offer.<p>So, let's say I take that and I create an engineering specification.  Build a service that does this, this, this, and this, duplicating cloudkick, right down to the screen layout of the dashboards, if you're so inclined.<p>Now, go hire 10 engineers.  No, make it 20.  Now hire 5 project managers.  Pay each engineer $100K + benefits, say they cost me $150K per year.  Pay each project manager $150K  + benefits, say they cost me $200K per year.  So now I have 20 engineers and 5 project managers whose combined salaries + benefits cost me $4 million a year.  Let them work for two years.  For $8MM, I have my own cloudkick, right?<p>Why would I pay more than $8MM?  Perhaps they didn't, I don't know.  Again, my questions isn't about cloudkick.  It's about why you see companies make the buy decision, when it often seems like it would be well within their ability to build it themselves, if they are so willing to spend money.