Rackspace plays to its strengths with new Managed Cloud offering

Rackspace has today announced a managed services offering called Managed Cloud which aims to give flexibility on managed services but with DIY-styled pricing.

The new Managed Cloud service offers two options: Managed Infrastructure, which offers what seems to be a standard 24x7 access to engineering support plus other features including architectural, security and launch guidance, and Managed Operations, which is essentially Rackspace managing the account 24x7.

Speaking to CloudTech, Rackspace VP technology and products Nigel Beighton said Managed Infrastructure was more of a “reactive” service as opposed to Managed Operations. “Effectively we’re rationalising across the board for all of our products,” he said.

The move towards this product has evidently come from a rise in hybrid cloud, the more pervasive nature of cloud computing yet with a greater variety of customers and options available to those customers. Last year Rackspace released a survey detailing how hybrid cloud was seen as the future for three in five enterprises.

And, with a relatively turbulent time for the firm – moving co-founder Graham Weston back as CEO after the retirement of Lanham Napier, rumours abound of becoming a private company – it makes sense that this latest offering plays into Rackspace’s main strength, managed cloud hosting.

Rackspace offers a fully managed service but often gets lumped in the same category as an Amazon Web Services, an Azure or a Google, leading to what may be considered unfair comparisons.

Beighton refused to agree with it being a ‘bugbear’ when CloudTech put it to him, instead artfully calling it “a good marketing challenge.”

“I must admit I’m forever explaining the difference to people and, do you know what, I think I still will be going forward, just because you’ve got some very strong players in the market,” he explains.

Pricing is a key element in Rackspace’s strategy, least of all being obfuscatory in its cost structure when compared to unmanaged IaaS providers.

“One of the key elements on the pricing is ‘we could have been opaque’ – hide the raw infrastructure costs within the support charge,” Beighton says. “If we did that we just felt that wasn’t being transparent, one of our core values to our customer base.

As a result, when a Racker gets a bill, they get it in triplicate: a service charge; the infrastructure cost; and automatically applied discounts based on their total spend. And this is where the comparisons with Google, in particular, come in.

 “We’ve adopted very much the same model as Google in terms of discounting,” Beighton says. “It’s not so much people asking for it, it’s about automatically applying it so they know where they stand.

“That comparison with Google, and Azure, and AWS, will always be there, and it’s why we are transparent on the pricing side of it because there will be part of what we do always compared with what they do.”

Rackspace is quick to note that not every company would be ripe for this Managed Cloud offering. Beighton argues there are three types of customer for this model; startups who are out of their early development phase; SMB to low end enterprise who don’t want to build new skills; and companies who want the agility and cost savings of cloud.

Yet for those who do buy in to the Rackspace product, it’s a big commitment. Similar to the likes of Salesforce and others, Rackspace customers – or Rackers – are seen as fans, who get ‘fanatical support’ from their provider.

Beighton argues this is a good thing for the company. “We’re a human business,” he says. “We’re not about the infrastructure, we’re about the people.”

Managed Infrastructure comes in at £0.0035 per GB/hr RAM with £35 per month minimum, while Managed Operations costs £0.0150 with a £350 per month minimum spend.

You can find out more about the product here.

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