Rackspace to Focus on Managed Cloud Services

Rackspace will offer a comprehensive managed cloud service in competition with basic infrastructure providers. They will provide premium support service, dubbed “Fanatical Support”, alongside their infrastructure hosting service. They will also have a new price model for their support service as well as a new developer service. Rackspace changed their strategy to stay afloat as competition in the cloud commodity market stiffens.

According to Rackspace, organizations can choose to pay for support services from their commodity cloud service provider (if offered) or they can use in-house/employ outside help from IT specialists to install and manage their infrastructure and applications as well as ongoing maintenance. Obviously, all managed cloud providers agree that dealing with a single provider to host and support your cloud infrastructure is less hectic and cost-effective as opposed to dealing with multiple service providers.

Rackspace intends to tap into this cloud market segment, which they believe has been left out as observed by Graham Weston, Rackspace co-founder and CEO, “The cloud market is evolving. More customers are looking for a trusted partner with specialized expertise to help manage their cloud. Rackspace is ideally positioned to lead this managed cloud segment of the market,” He continued, “Our new service levels will help businesses tap the power of the cloud without the pain of recruiting experts in dozens of complex technologies. We are the partner that will be with them every step of the way to help make their cloud strategy successful.”

As a “managed cloud specialist”, Rackspace has chopped off direct competition from cloud computing giants like AWS, Google and Microsoft . Its nearly carved out niche will see competition from the likes of Oracle, IBM, and Navisite in US while in Europe its competitors include SAP, Verizon, CenturyLink, and Colt.

Their new cloud managed services are:

Managed service levels

Rackspace customers will have two levels of support to be provided on a need-be basis. Customers will choose between two options:

  1. Managed infrastructure: Customers who choose this support level will get architecture advisors, security guidance, code development assistance, launch assistance, and access to cloud engineers 24 hours a day.
  2. Managed operations: This is an advanced support level. Customers will get all services offered at the Managed Infrastructure level. In addition, they will get a dedicated account manager. Cloud engineers will also be available 24 hours a day to monitor and respond to any alerts, as well as manage common operating systems and application stacks.

2.1  Approaches to managed operations:

Rackspace has devised two approaches to offer these managed operations services.

  1. Rackspace will manually log into the customer’s servers to manage and, when necessary, help fix them.
  2. Utilize Rackspace DevOps Automation Service, which manages a customer’s infrastructure as code, for quick installations and streamlined operations.

All customers will enjoy a free cloud monitoring as well as have real-time visibility into their infrastructure (video below).

New pricing model

This new pricing model will allow customers to see what they pay for. It provides separate prices for infrastructure service and support. Since managed cloud providers aggregate the prices of infrastructure hosting as well as support services, Rackspace decided to separate them to allow customers to compare their infrastructure hosting service with other basic cloud infrastructure providers. Existing customers may choose to use the new pricing model or not, but all new public cloud customers will be subjected to it.

The Managed Infrastructure service level will be charged at an hourly rate of $0.005/GB RAM. This is a monthly subscription with a minimum amount of $50. On the other hand, the Managed Operations service level will be charged at an hourly rate of $0.02/GB RAM. This is also a monthly subscription with a minimum amount of $500.

These two managed service levels will be charged in addition to the fee charged for basic infrastructure service.

New Developer service

Developer+ is a new program that allows developers to use Rackspace’s offerings for a period of 1 year. After this, they can opt for either Managed Infrastructure or Managed Operations.

Rackspace has clearly differentiated itself and has even carved out a niche to stand out from the crowd. By separating its prices for cloud infrastructure from those of support services, customers can see the value-add that makes Rackspace offerings slightly pricey. In the wake of price wars in the cloud-computing arena, Rackspace has decided not bow out. Instead, they are highlighting the difference between their prices with those of their competitors to give them an equal chance to compare apples-to-apples.