Rackspace After Taylor

By now, you may have heard that our CEO, Taylor Rhodes, is leaving Rackspace and that the board has asked me to step up as interim CEO.

I’m sure this news has hit many of you as hard as it hit me when I heard it. Taylor and I have worked together since we were at EDS, way back when mainframes ruled the earth. He’s the one who brought me to Rackspace. He has mentored me through new roles in many parts of our business. And he’s done the same for scores of other Rackers.

Taylor has led us successfully through some challenging times, and I’m grateful to him for that. He has positioned us well for the next phase of the Rackspace journey — which begins today.

While my title is “interim” CEO, our board and I are in agreement that we’re not going to take any kind of timeout. We’re going to keep driving to expand Rackspace’s leadership of the fast-growing market for managed cloud services.

In his blog post earlier today, Taylor mentioned how well we’re performing, and his confidence in our future. I share that confidence, based on our growth in revenue, profit, and cash flow in recent quarters, and on the initiatives we have underway for the remainder of 2017.

Now that we’re a private company, we don’t publicly report many financial metrics. But I can tell you that for the full year of 2016, we grew in revenue across all of our product lines. We grew EBITDA and expanded our EBITDA margins. And we more than doubled our cash flow and cash flow margins.

Looking forward to the rest of 2017:

  • Our sales pipeline is strong.
  • Our existing customers place a high value on the expertise and Fanatical Support that we provide, as measured by the rising Net Promoter Scores that they give us, and by their declining rate of departure churn, which just hit a five-quarter low.
  • Our managed public cloud services, for customers who use the infrastructure of Amazon Web Services and Microsoft Azure, were launched less than two years ago, and are growing at a rate of more than 1,400 percent, year over year. Rackspace has achieved the highest partner status available from AWS and Microsoft Azure. More than 1,000 Rackers have achieved technical certifications on those platforms.
  • Under our recently announced partnership with Google, we will soon add managed public cloud services for the Google Cloud Platform. This will make us the only company on the planet that can deliver expertise and support on all the leading public and private clouds, including the VMware, Microsoft and OpenStack private clouds.
  • We are working to open a data center in Germany, to complement the sales office we opened there late last year. These facilities will help us meet brisk demand for managed cloud services among companies doing business in Germany and all across continental Europe.

In short, Taylor leaves Rackspace in solid condition. I and my fellow Rackers across four continents are determined to build on the momentum he has helped us create. Taylor will be with us until May 16, so please join me in thanking him for his contributions to Rackspace and San Antonio, and wish him and his family well in their next adventure.

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Jeff Cotten serves as president and interim CEO of Rackspace, and is responsible for executing the company’s vision and strategy. Previously, Jeff oversaw three key areas of the business: global sales, international operations and our fastest-growing product lines, including Fanatical Support for Amazon Web Services (FAWS), Rackspace Managed Security and our support for customers who use complex ecommerce and content-management solutions. Jeff also led our efforts to develop solutions for the growing number of customers who are using multiple clouds — across AWS, the Microsoft Cloud, OpenStack, VMware and dedicated servers. He then directed our more than half-billion dollar business outside the Americas. Working from our offices in London and Zurich, Jeff was responsible for sales, marketing and operations across Europe, the Asia-Pacific region, the Middle East and Africa. Jeff joined Rackspace in 2008 and served in a number of key roles, including as the founder and leader of our first Strategic Deal Center, director of sales operations and leader of our first team focused on accelerating the growth of our Fortune 1000 customers. A native of Dallas, Jeff began his career at EDS where he managed the company's relationship with one of its 50 largest clients for more than 10 years. Jeff earned a bachelor's degree in computer science from the University of Texas and a master's degree in engineering management from Southern Methodist University. He is an innovator, author and contributor to seven patents.

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