Rackspace's Lateral Move Toward Other Clouds is Smart, Not Unfocused

by Ostatic Staff - Feb. 18, 2016

There are a lot of conflicting opinions flying around about Rackspace this week. As we reported, the company offers its own public and private clouds--but it is actively pursuing supporting other clouds as well. The comany has partnered up with Linux vendor Red Hat to add another Openstack-as-a-Service solution to its mix of cloud offerings. The company also reported Q4 revenue and profit that topped analysts’ expectations, but there are concerns that costs are rising at the firm, and some are questioning whether the company is focused enough. Here is why Rackspace is poised to do just fine.

According to The Register, the dominance of just a couple of public cloud solutions weighs heavily on Rackspace:

"Worrying, too, is a slow-down in Rackspace’s native OpenStack public cloud business as the masses flock to Amazon’s AWS and Microsoft’s Azure....unknown is the impact that AWS and Azure business will have, both eroding the OpenStack customer base and the revenue from the new business."

 These types of questions are largely arising because Rackspace was very squarely focused on OpenStack and its own cloud offerings, but has steadily spread out to support AWS and Azure, and partnered with Red Hat. There is nothing wrong with spreading out to support cloud offerings that are succeeding. 

No company offers more proof of that than Red Hat, which has built its success on world-class support. Red Hat has proven that supporting technology tools and platforms can be lucrative and can win incredible loyalty from customers.

Rackspace and Red Hat can team to provide excellent support for both cloud services and the Linux bedrock underlying many cloud implementations. Taylor Rhodes at Rackspace, said the following on the company's earnings call: "During 2015...we launched Fanatical Support for Amazon Web Services and for Microsoft's private cloud Azure and Office 365. These moves open up huge and fast-growing new markets for us and strongly differentiate us as the only company with the tools and expertise to provide Fanatical Support for the world-leading clouds."

Indeed, Rackspace is smartly heading toward where cloud workloads are going, and the company is poised to succeed with that strategy even if it is not solely focused on its own cloud offerings.