Will Cloud Builders Help or Harm Rackspace’s Reputation?

Rackspace has made a name for itself as a provider of managed hosting services, by being an increasingly strong competitor in the public cloud market and as a key player in the open-source OpenStack project. This week, the company announced its new Cloud Builders business, in which a team can enter other companies’ data centers and install OpenStack for them. But with this move, has the company strategically broadened its portfolio or damagingly muddled its brand?

Established in 1998 as a hosting company, Rackspace entered the cloud storage market with Mosso in 2006. Mosso rebranded as Rackspace Cloud in 2009, and its technology became the current Cloud Files storage solution offered today. The Rackspace Cloud also includes a processing product known as Cloud Servers, based on technology Rackspace acquired with Slicehost in 2008. Figures collected by Onavo CEO Guy Rosen suggest that Rackspace is number two in the cloud-server business, behind Amazon. Those figures also imply that this gap may be closing.

But despite growing revenues, it’s unlikely Rackspace will pass Amazon soon, and perhaps recognizing that, the company joined with NASA and others to establish the open-source OpenStack project. The community behind the project has grown, and now includes over fifty hardware, software and solutions providers, including Canonical, Cisco, Dell and Citrix. Rackspace donated its Cloud Files code to the project, which became OpenStack Object Storage. NASA contributed code — largely sourced from its contractor, Anso — from its Nebula Cloud, which became OpenStack Compute. Together, these products offer an increasingly robust open-source solution for those wanting to build and run clouds.

Lending corporate weight to OpenStack makes sense for Rackspace on a number of fronts:

  • The project sits logically alongside the company’s existing hosting and cloud businesses.
  • The donated Rackspace Cloud Files code is improved and extended through the efforts of Rackspace’s many partners in OpenStack.
  • These enhancements are incorporated back into the commercial Cloud Files product, making it better, too.
  • Developers and users gain familiarity with the Rackspace Cloud Files/OpenStack Object Storage methodology, which gains traction as it is used by Rackspace and every non-Rackspace site to which OpenStack is deployed.
  • Rackspace’s commercial hosting and cloud products become the logical solution for those seeking support and other features not available from a smaller open-source deployment of the code, increasing market share and revenue.

Each of these steps is logical and defensible, and complement the existing products in Rackspace’s portfolio. Despite the company’s acknowledged reputation for “Fanatical Support,” this week’s announcement of Cloud Builders strikes me as a step that is far less clear than those that went before. It is worth noting that my colleague Derrick Harris seems to disagree, writing on Tuesday that “today’s news should be good news both for OpenStack adoption and for Rackspace’s bottom line.”

With Cloud Builders, Rackspace offers three services:

  • Support for those trying to deploy OpenStack on their own hardware, which fits well beside Rackspace’s existing support team.
  • Training and certification for those wishing to design, deploy and maintain OpenStack clouds; it may be possible to align this with Rackspace’s existing support apparatus.
  • Deployment services that will go out to customer sites, design a cloud infrastructure and then plug the requisite hardware and software together to get a new cloud up and running.

It is this final service that competes with the company’s existing businesses, possibly drawing customers away from Rackspace’s established hosting and cloud products. It brings Rackspace inside the data center, into direct competition with solutions providers previously might have recommended Rackspace’s off-site products; those competitors could retaliate in the future by recommending other hosting or cloud providers. Finally, and far more seriously, the announcement about Cloud Builders creates confusion in the market about Rackspace’s intentions. It’s a model that is expensive, labor-intensive and difficult to scale — very different from Rackspace which today operates at scale and with low margins.

Cloud Builders only subtly changes Rackspace today, but it also leaves me uncertain about what the company wants to be tomorrow.

Question of the week

Will Cloud Builders help or harm Rackspace in the long term?

Viliv X70 UMPC Deliveries Delayed: Component Shortage

Customers who ordered a Viliv X70 UMPC from retailer Dynamism have received emails informing them of a delivery delay. Dynamism cites a component shortage by the manufacturer, Viliv, as the reason for the delay. That doesn’t provide much comfort for those anxiously awaiting the arrival of their UMPC, but we can assume the UMPC revival is solid if components are in short supply. Those who are waiting delivery of their new X70 can watch our video review of the UMPC to see what they are missing:
[wpvideo BFO4sETH w=500]
(via pocketables)

Cloud Computing’s Three-Horse Race

horseraceCloud Computing has hit the main stage, solidly capturing the minds of both the technology and business communities. But while three distinct deployment models have emerged, it’s far from certain which of them will go on to prosper. The three models are:

1. Renting raw hardware: compute processing, data storage and networking bandwidth.
2. Leveraging an integrated application development engine.
3. Ordering an application.

So in order to get a better sense of the prospects of each approach, let’s take a closer look at key companies promoting them and the market forces shaping them. Read More about Cloud Computing’s Three-Horse Race

RightScale Makes Multiple Clouds Work

As corporate giants get more interested in managing clouds, startups already in the sector are defending their turf and trying to make cloud computing more enterprise friendly. RightScale, a one-year-old startup that offers a management platform for Amazon’s Web Services said today that it now can offer the same management for clouds provided by GoGrid and FlexiScale. It also says it’s working with Rackspace to integrate information from the Mosso and F5 clouds.

For enterprise customers that want to operate their software on multiple operating systems or on multiple platforms the news could be compelling. Essentially, RightScale is offering customers a one-stop-shop for managing and provisioning different types of clouds. With such an offering it’s as easy to run applications in Windows-based clouds offered by GoGrid as in Linux-based clouds as offered by Amazon.

This will help with the problems of ensuring reliability and the pain of dealing with platform specific clouds, issues I wrote about a few months ago in why enterprises are not ready to trust the cloud.

Forrester Defines the Cloud, But We Beg to Differ

A new report out from Forrester takes a chart-filled look at cloud computing, offering the analyst firm’s own definition of the cloud and attempting to dispel three myths they have noticed. Since we at GigaOM buy pretty heavily into two of these so-called myths — namely that a cloud is comprised of a scalable virtualized server environment and that it’s a low-margin business — I was eager to see where we had been led astray.

But I don’t think we have been. The report takes a big tent approach to clouds, applying the cloud moniker to both the end user market and to a class of goods it calls infrastructure-as-a-service. That’s far above the hardware level where Amazon, Mosso and GoGrid sit, and includes software-as-a-service and even consumer web applications like Zillow or Flickr. Such a broad definition doesn’t really help clear any of the fog for the industry, and would likely only serve to make the term “cloud” even more of a marketing tool than it already is. Read More about Forrester Defines the Cloud, But We Beg to Differ

How Cloud & Utility Computing Are Different

Written by Geva Perry, chief marketing officer at GigaSpace Technologies.

We are witnessing a seismic shift in information technology — the kind that comes around every decade or so. It is so massive that it affects not only business models, but the underlying architecture of how we develop, deploy, run and deliver applications. This shift has given a new relevance to ideas such as cloud computing and utility computing. Not surprisingly, these two different ideas are often lumped together. Read More about How Cloud & Utility Computing Are Different

Mosso Joins the Cloud Computing Fray

Amazon’s foray into on-demand web services such as its S3 storage and EC2 computing service has done two things: brought the focus onto cloud computing and at the same time up-ended the pricing structure of the Internet infrastructure. Of course, it has also prompted a spate of copycats and liberal interpretation of the term “cloud computing.”

Take Mosso, an on-demand hosting start-up backed by Rackspace of San Antonio, Texas, as an example. For $100 a month, Mosso is offering 50 GB disk-space and 500 GB bandwidth and 3 million web requests per month. Beyond that it is 25 cents per gigabyte for bandwidth and 3 pennies per 1000 requests.

Mosso Co-founders Todd Morey and Jonathan Bryce, both ex-Rackspace employees, are going after startups and web app developers with their new “hosting cloud.”
Read More about Mosso Joins the Cloud Computing Fray