Managed Cloud: A New Way To Stay Fast And Lean

Back when Rackspace launched as a five-person startup 15 years ago, hundreds of IT hosting companies were providing access to single-tenant servers over the Internet. What those hosting companies didn’t provide, however, was customer service. Most wouldn’t even answer the phone.

Except for us. We were a tiny player looking for a way to differentiate ourselves — to serve business customers better than the big telecom companies and other competitors did. So we hired geeks with a great bedside manner. We began providing customer service and branded it Fanatical Support. We developed specialized expertise in technologies such as Linux and Windows and network security. We created the managed hosting industry. And as more and more customers recommended us, we quickly dominated that industry.

Today, we’re bringing that same approach to the cloud, by defining a new industry category — managed cloud.

We’re targeting businesses and developers who want to tap the power of the cloud without the pain of running everything themselves — and the expense of recruiting or contracting with experts in dozens of complex technologies.

These customers want to stay fast and lean. They want to focus their precious engineering talent on their core business, rather than swelling their payroll with folks to run IT that doesn’t differentiate their company.

To better serve these customers, we are:

  • Launching two enhanced service levels for public-cloud customers. Our basic level, called Managed Infrastructure, offers Fanatical Support with much more managed service than do the more-expensive, premium service levels offered by many of our competitors. Our higher service level, called Managed Operations, provides even more managed services, up the stack into the support of application level — addressing customer needs that most of our rivals won’t even touch. (Details are available here.)
  • Restructuring our pricing model to provide a transparent and separate view of infrastructure prices and the value of cloud management expertise.
  • Creating a new developer+ program, to launch later this month, for those who want to see how the managed cloud can help them focus on building their app rather than diverting their efforts to manage cloud operations.
  • Adding new Support SLAs for Managed Infrastructure and Managed Operations customers

With these steps, we are making clear the difference between Rackspace and the larger, unmanaged cloud players in our industry.

They rent out access to raw infrastructure and require customers to either manage it themselves, or employ multiple vendors to do so.

We don’t deal in raw infrastructure. We provide solutions and outcomes, all of which include managed services and Fanatical Support, and enable customers to focus on their core businesses.

They provide unmanaged clouds.

We are the #1 managed cloud company.

But don’t take our word for it. Gartner Inc. just published its new Magic Quadrant for Cloud-Enabled Managed Hosting, with special attention to the managed services and support that each provider delivers above the infrastructure layer. Gartner made separate assessments for North America and Europe. And it ranked Rackspace as a leader in both markets.

Another top analyst firm in our industry, IDC, had this to say, through its research vice president Melanie Posey:

“Competition in the public cloud market has accelerated in the past year; however, Rackspace’s managed cloud approach provides an opportunity for significant differentiation from the rest of the pack. Rackspace’s new managed cloud strategy featuring enhanced SLAs and its long track record in delivering superior support will create sustainable competitive advantage in an increasingly crowded market.”

The competition that Melanie cites is, I think, very good for business users of the cloud. Recent price cuts by Google, Amazon, and Microsoft are helping to segment the cloud market in a way that makes clearer than ever the difference between unmanaged and managed cloud providers.

The Big Three offer only multi-tenant cloud hosting, and their one-size-fits-all approach starts to bind as a business user starts to grow. Those businesses often encounter noisy neighbors in the multi-tenant cloud. They have to overprovision to achieve the consistent performance that they need, which can result in some ugly surprises in the monthly bill. Any successful business today will use one or more data engines, many of which achieve higher performance and cost-efficiency on single-tenant hardware.

Rackspace architects help give each customer the best fit for its unique needs. We run each workload where it will achieve the highest performance, enhanced security, and cost efficiency — whether that’s on multi-tenant or single-tenant servers, on Linux or Windows, on OpenStack or VMware, in our data centers or those of the customer or a third party.

We provide not only economies of scale but also economies of expertise. We give businesses 24×7 access to our specialists in DevOps, MongoDB, Hadoop, Redis, Magento, Hybris, OracleATG, Adobe Experience Manager, Sitecore, Drupal, WordPress, SharePoint, and many other complex technologies.

The cost of hiring or contracting for engineering talent is a major component of the total cost of cloud computing that often exceeds the cost of raw infrastructure. That’s one reason that we’ve changed our pricing model: to make it easier to understand the various components of total cost, and compare providers of managed and unmanaged clouds.

We will now separate our multi-tenant cloud pricing into two parts: (a) the price of access to cloud infrastructure, and (b) a set of clear, simple fees that reflects the value of the cloud management services, guidance, Fanatical Support and service level agreements that we provide.

Another goal of our pricing changes is to better reflect the cost of serving customers of various sizes. As a customer grows and scales with us, it becomes less expensive for us to provide both the infrastructure and the managed services and support for each additional unit of computing. Our new pricing reflects that, as does our continuing use of volume discounts.

The key point is that Rackspace, as the managed cloud company, is focused more intently than ever on delivering Fanatical Support service and world-beating outcomes to businesses that want managed services, and are glad to pay for the value that they provide.

Check out this video of Taylor and some of our customers highlighting the benefits of a managed cloud built on Fanatical Support.

Taylor Rhodes served as CEO of Rackspace, responsible for all of the company’s operations in the U.S. and abroad, until May 2017. He excelled in a variety of leadership roles in sales, support, and international operations, and was known for achieving high levels of engagement with customers and Rackers alike.



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