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.

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Every IT department will joke about the support they have to provide to the rest of the organization: “Is it plugged in?” Every organization of a certain size has to provide internal support, but it’s a tough prospect in even the most tech-savvy of companies.

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For the New Year: A Success Toolkit

A new year often starts with reflection and resolutions, looking back on where you’ve been and making wishes for where you hope to go. Just as important to your success, though, is what’s happening in each given moment. Here are a few things you’ll need with you this year to help you succeed.

  1. Attention to small steps. On New Year’s Day, I found myself feeling increasingly overwhelmed by the goals I hoped to achieve this year and wondering how in the world I’d ever reach them. I became frustrated by the sheer volume of work that needed to be done and wasted the majority of the day worrying over it all. The next day, though, I remembered that success really comes from consistency in the small steps. I’ve made a lot of progress in my business over the past couple of years, and I know that what it’s really about is increasing the number of small steps I take, as well as the frequency that I take them. In 2010, the important thing is to simply take small steps — and more of them. Read More about For the New Year: A Success Toolkit

A Tale of Two Hard Drives: Apple’s Secret Weapon?

In my day job, helping people with computers, I see many failed hard drives. If the computer is under warranty, I’ll always try to get the system manufacturer to replace the drive rather than order a new one for the customer. Recently, two clients came in, one right after another, and it really illustrated the differences between Apple (s aapl) and everyone else when it comes to hardware support. “Lauren” bought a sub-$1000 PC, but didn’t consider the support costs and time involved. If she had, she might have second thoughts about her decision to buy a PC.

The Dell Experience

Client #1 comes in because Windows won’t boot. The minute she turns on the PC, I know the problem. It’s that horrible high-pitched clicking noise that is worse than nails on a chalkboard to any technician. It’s obvious the drive has failed and the solution is to replace it. I booted off a test CD and verified the hard drive failure.

Fortunately the computer is under warranty. No big deal, Dell (s dell) should replace the hard drive. I call Dell. After 20 minutes on hold, I’m not getting a live person, so I try the online chat and wait and wait and wait. Eventually, someone comes online. The first obstacle is that the client is a student and the father bought the computer via his work. Dell will not assist us until we tell them the owner of the computer and the shipping address. Arrrgh. So we play a multiple choice game for about 20 minutes trying to find out which name and address it was under. Read More about A Tale of Two Hard Drives: Apple’s Secret Weapon?