Rackspace Private Cloud: Repackaging Fanatical Support Around OpenStack

Yesterday Rackspace announced Rackspace Cloud Private Edition, a repackaging of their Cloud Builder services around the OpenStack product. If you want to hear a purely open source perspective on this move, I recommend you to read Christian Reilly’s article on the topic. However, I am going to approach the topic from the business strategy point of view. I will leave out the philosophical issues to Christian’s post and take a more pragmatic business point of view. From this position, I see it as a good strategic move.

Let us look back at the history of OpenStack and see how this move fits into the Rackspace strategy. When they open sourced their storage code and started OpenStack project, I called the move a hailmary pass by Rackspace to stem the pace at which AWS was getting the marketshare. Pundits might have different opinions on the impact of the move but from my point of view, it really helped Rackspace to move the attention away from AWS to a more federated cloud ecosystem. However, Rackspace saw tremendous traction on the private cloud market (however short term it may be) and they wanted to get a share on that pie. Even though they had the Cloud Builders business, it was clear to them that they need to productize their Cloud Builder offering before getting the enterprises to tai a look at them. Yesterday’s announcement is the result of this thinking and we will have to wait and see how this strategy pays off.

Simply put,

Rackspace Private Cloud = OpenStack + Rackspace Reference Architecture + Rackspace support

Right now, they have released the reference architecture they are using on their public cloud but they are expecting many others as they go by. Clearly, their target is on enterprise customers in USA but they are also hoping that some of the service providers outside of US (who don’t perceive Rackspace as their competitor) will end up paying them for their support. If I look at it without wearing a moral lens and from a purely business angle, I see it as a smart move by Rackspace as they move above the commoditized infrastructure layer to monetize. We will have to wait and see how it plays out for them.