Rackspace edges further away from the public cloud


Rackspace Inc. looks like its retreating even further from the public cloud with reports suggesting that up to 90 of its employees are being shifted to faster growing businesses in the company, such as hybrid and private cloud.

It’s not clear if any employees are going to be laid off, the San Antonio Business Journal reported on Tuesday. However, Rackspace told the Journal that it reshuffles its employees, which it refers to as “Rackers”, quite regularly to focus on “fast growing areas of its business”. It added that “from time to time” it does also eliminate some roles in certain areas when it decides to reduce investment.

Rackspace currently boasts a 6,000-strong workforce.

The company says it’s putting some of those 90 employees to work in areas like engineering private and hybrid clouds, and marketing for its public cloud services. It says the move is being made in preparation of an expected slowdown in new signups for OpenStack public cloud service, because most public cloud workloads these days end up in the hands of Amazon Web Services (AWS) or Microsoft Azure.

“At Rackspace, we regularly align Rackers to fast-growing areas of our business and may from time to time eliminate some roles in areas where we choose to reduce our investment,” the company said in a later statement. “We help Rackers, whose roles are eliminated, try and find new roles within the company and many do so. We anticipate that our 6,000-plus Racker workforce will continue to grow this year.”

If Rackspace does end up growing its workforce later this year it’ll be some success. The company has struggled in a public cloud market that has been ruthlessly unkind to companies trying to dislodge AWS and Azure. A number of challengers have fallen by the wayside, including Hewlett-Packard Enterprise and most recently, Verizon Wireless. As for Rackspace, it hasn’t given up, but it’s shifted its focus to forging partnerships with larger vendors like Red Hat Inc. to offer a hybrid cloud solution. Rackspace also notably teamed up with AWS and Azure to offer Fanatical Support, in response to customer demand for this kind of service.

In its most recent earnings call, Rackspace CEO Taylor Rhodes pointed to “high double digits” growth in the company’s OpenStack private cloud business.

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