Rackspace, battling Amazon, tiers cloud services to show off its strengths

by tech on July 15, 2014

Rackspace — the cloud provider that has always differentiated itself based on the value of its “fanatical service” is now tiering its more basic  IaaS cloud resources from its higher-level, support-intensive offerings. The goal is to make comparisons with public cloud giants Amazon Web Services, Microsoft Azure and Google easier and to play up the fact that, for a little more money, Rackspace can offer much more hand holding than those public cloud giants.

The San Antonio, Texas-based company has always had core infrastructure as well as higher level managed services but didn’t do a good job explaining that to customers, according to Rackspace CTO John Engates (pictured above). “People looked at our price and the AWS price and thought they were comparing apples to apples. In reality, we had apple pie, not apples,” he said in an interview.

So, going forward, Rackspace will offer managed infrastructure starting at $0.005 per GB RAM ($50 minimum per month) and higher-level managed operations at $0.02/GB RAM ($500 per month minimum). The latter is “all-in managed cloud”  where Rackspace does much of the heavy lifting for customers, Engates said.

Carl Brooks, analyst with The 451 Group said this messaging will help clarify Rackspace advantages to potential users. “What they’re doing here is getting out of the endless comparisons with AWS/MSFT/GOOG,” he said via email.

“Rackspace can now say, look, it costs X, same as the big vendors, and it does Y [as in] you like Amazon? Yes, but we have support and oh yes we have 10GB internal networking and $0.02 extra gets you a whole unicorn and a princess party all to yourself  and there’s no way in hell AWS or Azure can touch that.”

rackspace tiersCalling all developers

And, to attract more developers to its platform — and perhaps woo them from AWS — a new developer+ program will provide them with a full array of resources — 40GB of CloudFiles storage, free monitoring, networking, DNS, email service for up to 50,000 messages per month, load balancing — for free for 12 months. This is important because developers are the constituency that has driven AWS success.

“Free resources for an entire year — that’s better than Amazon’s free tier because you can actually run a real app on it — the AWS free tier is not enough to do anything interesting,” Engates claimed. I’ll leave it to AWS fans to dispute that contention.

Rackspace is much smaller than these huge public cloud player– which have other profit cetners to fund their massive cloud projects. That is is one reason it hired Morgan Stanley in May to evaluate options including a possible sale or merger.



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