Service Provider Cloud

Rackspace: We Don't Do Colo (We Never Did)

Rackspace was early into the cloud market, but people don't know who they are.

Founded in 1998, with $2 billion annual revenue last year, Rackspace is historically a managed services provider, and is moving aggressively into providing services to help enterprises launch and manage cloud infrastructure on Amazon Web Services Inc. , Microsoft Corp. (Nasdaq: MSFT) Azure, Rackspace's own cloud platform and private clouds. Rackspace founded OpenStack , and remains aggressively commitment to that technology.

And yet people have the wrong idea. "People have a picture of us as a data center company," CTO John Engates tells Light Reading. "I still have to explain to them we don't do colocation. We never have done colo."

Maybe it's the name, he says. "The name 'Rackspace' has a connotation."

Rackspace is launching a marketing campaign to get out the message about what it really does, with radio spots, streaming media, in airports and on the web, including Rackspace's own website.

"The primary message is around your cloud, our expertise," Engates says. "You can pick whatever cloud is best for your business and we'll bring the expertise to the table for you."

The campaign comes as Rackspace goes private in a $4.3 billion deal with with a group of investors led by Apollo Global Management. Announced in late August, the deal is expected to close by year end. (See Rackspace Sale Speeds Pivot to Cloud Support.)

Rackspace's revenue primarily comes from its data centers, but services are its future, Engates says. He declined to provide a specific breakout of data center revenue versus service revenue. "But more and more what we're focusing on is the services, because that's what we do best. What we can do is to help customers make the migration to the cloud, going from traditional to digital business."

He adds, "The infrastructure isn't where the value is." That's reminiscent of a recent strategic statement by Mirantis Inc. , which is looking to broaden from providing OpenStack support to a full suite of cloud infrastructure service. Mirantis CEO and co-founder Alex Freedland tells Light Reading that Mirantis wants to become a cloud provider without data centers. (See Mirantis Charts Course Far Beyond OpenStack.)

Enterprises' IT departments are expert in enterprise tools, such as managing EMC storage arrays, or running Microsoft Exchange or SQL. Cloud requires different tools, such as NoSQL, Chef and Ansible. Enterprises lack skills in those tools, and that's where Rackspace comes in.

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Rackspace has more than 300 certified AWS Certified Solutions Architects, Certified Sysops Administrators, and Certified DevOps Engineers on staff, up from zero 19 months ago, and also provides support in Microsoft Azure, Engates says.

Early cloud adopters are there because they have that expertise in-house. Now the mainstream market is moving to the cloud, and can use the help of an organization like Rackspace, Engates says.

Rackspace sees enterprises as not just moving to the cloud -- they're moving to multiple clouds. While IT departments are familiar with Microsoft and find the transition to Azure a natural fit, lines of business deploy applications on AWS. Both VMware Inc. (NYSE: VMW) and Google (Nasdaq: GOOG) are also supporting multi-cloud strategies for enterprise customers. (See VMware Seeks Cloud Dominance by Building Bridges and Google: 'Dead Serious' About Enterprise Cloud.)

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— Mitch Wagner, Follow me on TwitterVisit my LinkedIn profile, Editor, Light Reading Enterprise Cloud

Mitch Wagner 10/11/2016 | 11:21:21 PM
Re: AWS Both Microsoft and Amazon seem to be evolving distinct personalities, with considerable overlap.

I'm not seeing how Google differentiates, though. And with Diane Greene coming up on a year into her tenure, I'm wondering when we're going to start to see her make a difference. 
danielcawrey 10/10/2016 | 2:27:43 PM
AWS Interesting read. I think alot of growth is still in AWS-based cloud services. More and more companies want to reduce infrastructure, reduce cost. It seems Rackspace recognizes where it can provide the most value. 
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