The past six months have been a whirlwind for Rackspace and its channel partners. Since the global relaunch of its partner program last September, Rackspace has guided its 1,500 partners -- 1,100 of whom are in the U.S. -- and helped shape their strategy to attack managed hosting and cloud services.
Christopher Rajiah, Rackspace's new director of North American channels, joined in December after running channels at Extreme Networks. Since taking over, Rajiah has worked closely with Rackspace Vice President of Worldwide Channels Robert Fuller to make the partner experience more streamlined and define a clear structure, and create consistency. As Rackspace builds out its three businesses -- Managed Hosting, Cloud Hosting, and Email & Apps, Rajiah is charged with driving sales through referral and reseller partners and creating attractive offers in each separate segment.
Channelweb.com recently caught up with Rajiah to talk about Rackspace and how it plans to help VARs grow and embrace the evolving technology landscape. Here are excerpts from that conversation.
Rackspace is doing a lot more in the cloud. What percentage of Rackspace partners are selling into cloud computing environments now?
We don't disclose the percentages, but I will say that today our partner program is about 1,500 partners globally that fall into the three buckets - managed hosting, cloud and Email & Apps. We have partner programs in each of these as well that have different requirements and incentives.
What is Rackspace doing to get partners up to speed on the managed hosting and cloud side and to help them adapt to new business models that they have to embrace?
First, you have to look at traditionally what kind of partners Rackspace has focused on. We are very successful today if you look at e-commerce partners, agency partners, partners who have applications -- different software applications that need hosting -- that would make a big part of the partner-base today. But the new targets are those global systems integrators and new value-added resellers that are out there. When we look at enabling those partners, we do computing as a service through cloud and managed hosting, there's a shift of how customers buy IT services. These partners, the value-added resellers at least, make their living selling a lot of on-premise IT equipment and services. We see the acceleration in the transition, and there's a community of partners that do not have established hosting practices and have the need to move very quickly to build that value proposition. These are the dynamics and the opportunity we see, and we will capitalize on this by targeting those communities, not only to reach deeper into the SMB market but to penetrate further into the enterprise.
How is Rackspace helping partners prepare for this shift?
If you look at the relaunch of the program, we created certain sections in our portal to increase our training modules. We increased the search functionality and created joint collateral and training for the partner community. A lot of it is around the training and helping these partners who traditionally sold on-premise make that transition into more of a hosted offer. I'm not saying they'll make this transition overnight. If you look at the industry, only about 10 percent of all customer IT is hosted today. That's another 90 percent left to be hosted, so that's collocated, managed and cloud. I think partners are starting to realize the shift and the customers are starting to demand it. It's a great opportunity for Rackspace to come in and help our partners with that transition so the 10 percent today can be 20 percent tomorrow. It's a transition that we want to go into closely with our partners, and we want to help them to be able to maintain their reputation because in Rackspace, they'll have a trusted and reliable partner to offer that solution with.
As Rackspace broadens its various solution areas, how is the type of solution provider or VAR you work with changing? What is the profile of the new kind of VAR offering managed, hosted or cloud offerings? Is Rackspace targeting different kinds of VARs now?
First let me talk about the traditional VAR, the Cisco reseller and NetApp reseller. I think you're seeing those businesses and those value-added resellers looking to enhance their offerings. You're seeing that shift and that's a demand that's coming to us. But I also see that within our existing base as well.
One example I can put out there is [Microsoft] SharePoint. There are a lot of SharePoint partners out there who sell that service and customers have the choice. Partners give the customers opportunities to do it themselves and install the application and manage it. But I see those SharePoint resellers moving toward a model where they're working with Rackspace to offer the customers other options, like in a cloud environment. Now you might not get all of the functionality but you get a good subset of it. In a dedicated hosting environment, you can offer your customer even more. You can offer it to integrate with Active Directory and Microsoft Exchange Server. [One large SharePoint partner] is working with us to leverage either our public or private cloud technologies. That gives them the opportunity to give more access to their customers. I see that coming from new partners and existing partners who are changing the way they do business from what they've done in the past.
Next: Rackspace Looks Ahead