Cloud services company Rackspace Inc. is teaming up with Hewlett-Packard Enterprise Co. to deliver what they say is the first pay-per-use version of OpenStack.

Open Stack is an open source platform for creating and managing large collections of virtual private servers in a cloud computing environment. The new offering will be delivered as a managed service, which means it brings many of the benefits associated with public cloud to what is essentially a private cloud.

Customers can choose from locating their OpenStack private clouds in their own data centers, in a colocation facility, or in one of Rackspace’s own data centers, the companies said. HPE will provide the hardware, which includes its latest Gen10 servers, as well as hardware support, while Rackspace will manage the private clouds for enterprises.

“With this innovative delivery model, Rackspace and HPE are removing the barriers to private cloud adoption, giving customers even more choice of technology platforms that best fit their application needs,” Scott Crenshaw, executive vice president of private cloud at Rackspace, said in a press release.

The launch is a timely one for both companies because data from International Data Corp. suggests that pay-as-you-go consumption models will account for 50 percent of on-premises and off-premises physical information technology and datacenter asset spending by 2018.

Pay-as-you-go pricing will be managed via HPE’s Flexible Capacity services, which means customers pay for the capacity they need at the times they need. The model also allows users to scale and burst according to their business needs. The companies make some big claims about the potential savings the model affords, up to 40 percent compared with “competitive public cloud options,” they said in the release.

One main advantage for customers choosing this option is that Rackspace and HPE will handle most of their compliance, privacy and security needs. The providers also guarantee 99.99 percent application programming interface uptime.

“With Rackspace’s private cloud expertise and service-first culture, they are well positioned to address the needs of HPE’s large installed base of infrastructure customers and help reduce any cloud migration risk.” said IDC Research Vice President Michelle Bailey. “This pay-per-use infrastructure is a new step forward in helping enterprises deploy private clouds with improved flexibility and cost transparency.”

The companies said their pay-per-use private cloud based on OpenStack will be available in all regions from Nov. 28.

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