HPE And Rackspace Take Aim At Public Cloud With A 'Groundbreaking' Pay-As-You-Go, OpenStack Private Cloud Service

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Hewlett Packard Enterprise and Rackspace Monday unleashed what the duo is calling a breakthrough OpenStack private cloud service that offers the same pay-as-you-go economics of public cloud at a 40 percent or more cost savings.

The new service, which HPE and Rackspace are billing as the first-ever pay-as-you-go, elastic, single tenant OpenStack private cloud, is targeted at Fortune 1000 customers anxious to get public cloud economics in a secure, managed private cloud service.

[Related: HPE President Neri On Dell EMC's Server-Storage Trade-Off, Cisco's AI Strategy, Compensation Changes, And The 'Massive' Partner Opportunity Ahead]

The two companies claim the new service fundamentally changes the private cloud versus public cloud debate by breaking the elastic private cloud barrier with OpenStack.

"What we have done is created a new standard for how private cloud is going to be consumed with better economics than public cloud," said Rackspace Executive Vice President of Private Cloud Scott Crenshaw in an interview with CRN. 

"It is the best of both worlds: a public cloud consumption model with all the advantages of a single tenant private cloud." Crenshaw (pictured) said. "This is groundbreaking. 

"We are provisioning single-tenant, dark capacity that is not shared with anybody else. That means you get enterprise stability, security, performance, and control. You get all the advantages of a private cloud, but you get it with a pay as you go consumption model at superior economics. Nobody else in the world is doing this."

Crenshaw said the service marks the first time an OpenStack private cloud can be purchased like a public cloud, with an hourly virtual machine or per-gigabyte pricing. "Our goal with this was to make private cloud more compelling for even more applications," he said. "We have broken through the private cloud barriers to make private cloud the optimal platform for most enterprise workloads."

Typically, customers will save 40 percent compared with a three-year reserved instance compared to the public cloud, said Crenshaw.

"The amazing thing here is customers are getting that 40 percent savings in a pay-as-you-go private cloud model," he said. "That is easy to do in the public cloud where you have servers shared by a 100 or 1,000 customers. In this case, it is all single tenant. You don't share anything."

The private cloud OpenStack development effort between the two companies, which involved 100 developers from both companies over the course of a year, was the brainchild of Crenshaw and HPE President Antonio Neri.  

"We knew we had an opportunity to change the industry," Crenshaw said of the meeting with Neri that led to the joint development project. "We knew we could make private cloud the preferred platform for the majority of enterprise workloads, but only if we integrated and gave customers a true cloud experience. Antonio is a visionary, and he knew this was a way to capture a large part of the market."

The new service – which will be offered initially by HPE and Rackspace in a direct sales effort with a channel plan in the works – will be available Nov. 28 either in a customer's own data center, a colocation facility or managed by Rackspace. HPE and Rackspace, which will be using the HPE Gen 10 DL360 and DL380 for the service, said specific pricing varies based on workloads.

Rackspace said it will follow up the HPE OpenStack private cloud offering with a similar pay-as-you-go private cloud service for both Microsoft Azure Stack and VMware Software Defined Data Center Private Cloud in 2018.

The HPE Rackspace elastic, single-tenant breakthrough came by leveraging HPE's flexible capacity pay-as-you-go software prowess with the Rackspace's technology integration muscle as the creator of OpenStack. "You bring those two together, and it is an unbeatable combination," said Crenshaw. "We built on the strength and foundation that made Rackspace the leader in private cloud as-a-service and HPE the leader in enterprise infrastructure."

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