A bigger, quieter, more indebted Rackspace

coworking space on Houston Street, a network of startup investors and advisers, a new vein of philanthropy, downtown revitalization and the example of a large tech firm that’s survived here despite San Antonio’s educational deficiencies. (Not easily: For years, the company bused in talent from Austin.)

Since Apollo’s takeover, Rackspace has gotten quieter and more inward-looking.

David Heard, co-founder of the San Antonio industry group Tech Bloc, has noticed the difference, though he says the company has stayed active in its corner of the business community. And it remains one of Tech Bloc’s marquee donors, giving “north of $10,000” annually.

“They didn’t flip a switch and disappear. They’re picking their shots more strategically,” Heard said. “Rackspace has become a little more of a typical corporate citizen.”

The difference is the company’s leadership. Apollo brought in Kevin Jones — who previously worked at DXC Technology, Dell, Hewlett-Packard and Electronic Data Systems — as Rackspace

CEO in April 2019. He replaced another Apollo hire, Joe Eazor.

Neither had San Antonio roots.

Weston and company were “super-engaged,” Heard said, because they were from here.

Today’s Rackspace Technology — the company changed its name in June — rejects any notion that it’s estranged from its hometown. About one-third of the company’s 6,800 employees work here.

“Rackspace Technology has been committed to the San Antonio market since 1998, and since that time, has become a major employer in the community,” company officials said in a statement. “At our headquarters here, we have over 2,200 Rackers and we are growing, despite the pandemic! In fact, we are currently hiring key talent in the San Antonio region to support our growth.”

Rackers put in about 20,000 volunteer hours at area nonprofits annually, they added, and the company hands out around $500,000 a year in grants and sponsorships to support local STEM education programs and other causes.

Fine.

It is worth remembering that the pre-Apollo Rackspace struggled in its competition against Amazon Web Services, Microsoft and other tech giants. Being scrappy wasn’t quite cutting it. When Wall Street doubted its growth prospects, Rackspace executives failed to change investors’ minds, and the company’s shares sold for less than their actual value.

Apollo eventually made an unrefusable offer.

“It’s par for the course,” said Michael Sury, a finance lecturer at the University of Texas at Austin’s McCombs School of Business. “Private equity firms will come in and look for companies that are undervalued, as Rack