UPDATED 06:44 EDT / AUGUST 13 2015

NEWS

Rackspace reveals plan to piggy-back on AWS’ success

Having all but thrown in the towel in its public cloud fight against Amazon Web Services (AWS), Rackspace Inc. says its now building a managed services product for its arch rival’s platform.

Rackspace CEO Taylor Rhodes announced the plan at the company’s second-quarter earnings call, saying he expects to roll out managed AWS services later in the year. The news came as Rhodes admitted that Rackspace’s hopes of a Q2 rebound in its public cloud offering failed to materialize, even as its overall profits rose by 30 percent. According to him, “growth remained slow throughout the quarter.”

Rhodes’ comments confirm earlier media speculation citing anonymous sources that Rackspace was working on an AWS offering.

Rackspace has made huge efforts with its OpenStack-based public infrastructure-as-a-service (IaaS) offering, and has even built its own servers to support bare-metal cloud infrastructure and cloud VM services, using specs from the Open Compute project. But try as it might, Rackspace has been unable to make much of a dent in the public cloud, where it faces fearsome opposition in the face of AWS, Google Cloud Platform and Microsoft Azure, all of whom have considerably more resources than Rhodes’ company.

Rackspace has known for some time (even if it hasn’t admitted it), that it’ll likely never be able to seriously compete with its rivals, hence its new strategy of offering managed services for its rival’s clouds. The firm already offers support, management and monitoring services on Azure, as well as managed services on Vmware-based private clouds. The firm also offers services for cloud products like Microsoft’s Office 365 and Google’s Apps for Work, and so the addition of managed services for AWS is a natural next step.

Alongside the company’s change of direction, Rhodes said he’s planning to expand its existing relationship with Intel Corp. around OpenStack. Rackspace will work alongside the chip maker to further the open-source cloud’s technology and promote its adoption in the enterprise, Diginomica reported.

“There is a very large class of applications and workloads out there that don’t want to be in a pure public cloud, and there are new and exciting things coming down the road in terms of containerized applications that will run differently in OpenStack than they will run anywhere else,” Rhodes explained. “So the ability to work with Intel to differentiate and focus OpenStack is actually a brilliant monetization strategy for us.”

Photo Credit: Eric Kilby via Compfight cc

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