Could Rackspace start the cloud vertical movement?

There are plenty of other posts detailing whether Rackspace (NYSE: RAX) should sell or split. I detailed my own thoughts here back in May 2014. With the speculation continuing to twist in different directions, one thought got me thinking. Ideally, the board of Rackspace would do what they felt was best for shareholders. Maybe the current thinking of split or sell is too simplistic. Maybe there is a possibility that takes them from the muddled world of cloud infrastructure players to a relatively niche area that is ripe for the taking. This shift would put Rackspace in a unique position of differentiation.

Leading the cloud verticals

What if Rackspace shifted gears to focus solely on providing services to cloud verticals? We already know that Rackspace does a fine job of their hosting and cloud services. To that end, their ‘Fanatical Support’ is well respected in the industry. Put cloud verticals together with Fanatical Support and it may end up being a fine option for the future of a leading organization. There are still challenges between the hosting and cloud business revenue models to consider. But beyond that, there is a chance to delve into an area that presents a challenge for many would-be cloud customers.

Starting with Healthcare

Across the spectrum of industries, the financial performance of healthcare (+23.7%) has outperformed other industries in the past year with information technology (+22.0%) trailing closely behind. There are a number of use cases in which cloud computing could (and does) provide value to healthcare organizations. Even considering the compliance requirements of the Health Insurance Portability and Accountability Act (HIPAA), cloud services from IaaS to SaaS make sense. Creating a specific vertical of services that is centered around environments with regulatory issues such as HIPAA enable an easier decision for healthcare organizations as opposed to the alternative where they create their own cloud-based solution.

Fanatical Support pivots

One of the core tenants to Rackspace’s value has been their Fanatical Support. Over the years, their Fanatical Support has served as a key differentiator for the company. Considering the specialized needs of different verticals (like healthcare), it would make sense to pivot this support model from general-purpose support to specialized support for each vertical. Again, bringing support back into the fold as a core differentiator and building on their existing successes.

The value of specialization

In the general-purpose cloud market, the services are fairly confusing and muddled. Not to mention the drive toward razor-thin margins. Different cloud providers offer slightly different features, classes of services and ecosystems. By specializing on cloud verticals, Rackspace could lead the charge in building a specific ecosystem around specific verticals. It has long been discussed that cloud verticals is the logical next step for cloud maturity. Pairing their support model with the specialized services needed by each vertical would create a new level of differentiation and potentially different economic model. And this economic model would present an opportunity for growth beyond the general-purpose cloud solutions offered today. Add in the leadership that Rackspace covets in the OpenStack space and the interest only grows further.

Is Rackspace the only provider that could leverage this route? No. But considering the position that Rackspace currently holds and their suite of components, it would be an interesting approach to follow. And it might present an opportunity for the entire company to pivot without considering sale or split. Granted, there is still a good case to be made for going private too.

Google TV or Apple TV?

Apple, met with limited success of the Apple TV, has called its device “a hobby” but Google, with its Google TV, is forging ahead with what it believes could revolutionize the industry. So how do they compare?

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Microsoft Finally Opens Azure for Business

Microsoft today finally opened up its cloud platform, Windows Azure, for business. Today the rubber meets the road — and we will soon see how Azure does against larger players such as Amazon and Rackspace, as well as how it affects Microsoft’s margins and other businesses.

Competitive Shopping — the Sense Behind Multiple e-Book Sources

By the middle of this year I expect we’ll have a big selection of e-book readers to choose from. There were dozens of readers on display at the CES 2010 this month, and it seems that every gadget maker is working on one for the market. I am still a firm believer that in the e-book world content is king, and that just having a reader on the market is not that big a deal. A reader with little available content is just a hunk of plastic, consumers want the ability to get the books they crave. Giant e-book sellers like Barnes & Noble (s bks) and Amazon (s amzn) have a big advantage in this area, with each offering hundreds of thousands of titles on their respective online stores. But the formats between the two stores are not compatible, and like any other retail segment competition could help keep prices competitive. Don’t believe that? I was in the market for some new e-book releases, and was surprised to find how widely the prices varied.

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Will Rackspace Partnership Save FathomDB?

Rackspace today said it would offer a database in the cloud through a partnership with FathomDB, a company that provides a relational database as a service. The move brings competition to the cloud database market and could be a lifeline for FathomDB.

Forget the Rest, Rackspace is Amazon’s Only Cloud Threat

The mainstream cloud-computing market is becoming a two-horse race, with Rackspace gaining fast on Amazon Web Services, and leaving an idle Microsoft in the dust. AWS is by no means pulling up lame, but, as evidenced this week, Rackspace is gaining customers and adding features so fast it’s difficult to believe AWS will be able to fend it off forever.

Tech Interrupted: Lessons From T-Mo and Rackspace

[qi:004] T-Mobile service experienced a hiccup yesterday evening that left some 2 million users without service, and the usual rush of tweets and news stories followed the outage. On Monday night Rackspace (s RAX), which provides managed hosting and cloud services, also experienced problems that took some customers out for hours. The interesting things here are the difference in how both firms handled it and how much publicity each event garnered.
As of last count, a Google search returned more than 250 articles dealing with the T-Mobile outage while there were only 11 articles on Rackspace’s outage, even though it affected popular sites like TechCrunch, Daily Booth and Posterous. The higher visibility of the T-Mobile outage is likely a result of how consumer-oriented the service is. So the first lesson is, if you are a consumer-facing service, you need to have your PR people on the blog, Twitter, newspaper circuit offering statements and remedies quickly. Read More about Tech Interrupted: Lessons From T-Mo and Rackspace

Will Amazon’s Virtual Private Cloud Be Private Enough?

logo_awsAmazon (s amzn) last night announced it Virtual Private Cloud service, essentially giving enterprise customers worried about security and control in the cloud a salve to get them to trust it. The offering provides access to Amazon’s web services through a virtual private network, which is basically a secure tunnel through the Internet from a corporate network to Amazon’s servers. It’s like having a private line to Amazon’s cloud as opposed to a party line. Read More about Will Amazon’s Virtual Private Cloud Be Private Enough?

Rackspace Opens Up Its Cloud for All

Logo_lockup_version-2 SPOTRackspace (s rax) said today that it will release the APIs for its Cloud Servers product, which provides on-demand, per-instance-based computing. Releasing the APIs means a variety of companies — such as RightScale — will be able to build products and development platforms using Rackspace’s cloud without going through its control panel to manually allocate the necessary servers. This helps bring Cloud Servers, which Rackspace acquired through its purchase of Slicehost last year, into the same league as Amazon’s (s amzn) EC2, which already allows developers to build platforms and management products on Amazon’s cloud through its own APIs.

Emil Sayegh, general manager of the Rackspace Cloud, says the company plans plants to add more features to its cloud products over the next few weeks, such as backing up information to Cloud Files (the Rackspace storage cloud) automatically, and Windows in the cloud. These are both features Amazon Web Services already has. Saygegh also says Rackspace plans to release its API to the open source community, which may speed the development of an open API for building programs on cloud platforms.