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RACKSPACE: 'OPEN IS BETTER'
Rackspace has set itself up as a cloud leader with its open-source, interoperable cloud platform. Rackspace, San Antonio, is the co-founder of the OpenStack standard, which supports vendor interoperability while providers such as Amazon use proprietary software in their platform. Rackspace CEO Lanham Napier criticized Amazon earlier this year, saying it stifles innovation.
"Amazon's proprietary system cultivates customer lock-in," Napier said in an interview with CRN in April. "We think OpenStack will be the technology standard and our fanatical support will be the service standard. We're trying to create a better service."
Rackspace has risen rapidly and in 2011 reported revenue of $1 billion. Rackspace costs per medium cloud server workload were higher than average for yearly, monthly and hourly contracts, but less expensive than Google and Microsoft in all three categories, according to the CRN/Cloud Spectator survey.
On a yearly basis, Rackspace's medium-size workload would cost $4,204, above the $3,656 average as calculated by CRN and Cloud Spectator. Monthly, the company would charge $350, above the $329 average, and it would charge 48 cents hourly, above the average of 45 cents.
The company argues that the OpenStack standard helps partners by letting them use whatever vendor product they choose in building a cloud stack. "For a cloud partner, open is better," he said. "They are in charge of their practice. They can add a lot more value in that program. Amazon is not a value-added service."
In early April, Rackspace turned ownership of the OpenStack platform over to the OpenStack Foundation. More than 150 companies are now participating in the project, including IBM, HP and Red Hat. And in August, Rackspace gave customers the ability to expand its cloud services with the first large-scale deployment of an OpenStack-powered public cloud.
Since August, Rackspace has unveiled a suite of cloud products and services that give partners a variety of options in migrating customers to the cloud. The products include Cloud Servers, Cloud Monitoring, Private Cloud Software and Critical Application Services to allow customers a choice of private, public or hybrid cloud platforms.
It's Rackspace's commitment to OpenStack as well as its "fanatical" support for partners that play large roles in drawing more than 7,000 partners to the company's cloud service, said Chris Rajiah, Rackspace's vice president of worldwide channels.
Rackspace cloud resellers can expect healthy margins, but systems integrators can use Rackspace's infrastructure to provide their own platform for their own clients, he said. "We give them the foundation of a hosted platform with security, reliability and cost savings," he said.
Rackspace's prices are higher than the industry average, but that's due to the support Rackspace offers, according to Rackspace CIO John Engates. "Not everybody wants to do self-service," Engates said. "Many people want good service and are willing to pay for it."