Because it's a war. A scrappy five year old company, Softlayer got bought out for $500m, merged with ThePlanet, and now SoftLayer is the first or second largest dedicated server company by sheer number of servers, and once all of TP is integrated with SL's automation, they'll most likely have the highest margins.

SL gets margins by being efficient whereas Rackspace gets margins by having an incredibly large and efficient sales team. SL is a hacker's hosting company which has made very solid progress selling to the enterprise.

To top that off, Salesforce just bought Heroku, telling the world that they really intend to compete in cloud hosting against Amazon, and any other clouds that matter (do any other clouds matter?). The competition is fierce, the stakes are high, and we're seeing an arms race. I wouldn't be surprised if HP got into the mix as well (there must be some reason they bought loudcloud and EDS beyond just rounding out their EYP division).

Any start-up who can help some of the big dedicated server firms (Softlayer, Rackspace, Peer1) either appear to be a sexy alternative to Amazon (to try and woo new startups, which is where all of the dedicated server companies are sort of lackluster, primarily due to a lack of advertising and a lack of a presence in the valley) has a high potential for acquisition in the next year. Look at the past three years of operations and cloud related start-ups. For example I'll be really surprised if either Puppet or Opscode are still independent entities in 2012.