You launched Rackspace Cloud in the UK in January this year. What has the reaction been to that?
We’ve signed up 5,000 customers since the launch. It’s tracking ahead of what we did in the States. Part of that is that the cloud is a better known phenomenon now so our timing for the UK market was better from that perspective. We’re happy with it.
There has been a lot of consolidation in the cloud provider industry recently – Savvis, Terremark and Cloud.com have all been acquired. Why do you think this is?
It’s natural for the industry to go through consolidation and this reminds me of the consolidation the hosting industry went through a decade ago. Part of what happens is you have wealthy telcos that are behind in the cloud game and they’re purchasing their way into it. From a strategic point of view it makes sense for them.
From our point of view, we’re trying to build something great – the service leader in cloud computing. We think greatness takes place over decades, not quickly. We’ve been at it 12 years now and still think it’s pretty early in the game. We want to keep building for years and years and construct something special.
But do you not worry about the potential competition from them?
I don’t worry about industry consolidation. 90% of M&A deals don’t work. It’s not a stress point for us at all. Competition is great for the customer. Part of the reason I’m not stressed about telcos entering the market is that we’re all about providing a world class service experience in this technology. How many great service experiences have you had with a telco? Not many.
What about your competition with Amazon? Why should a customer go with you instead of them?
Amazon is an awesome company; I am a loyal Amazon customer and have been for years. The notion of competing with them is crazy. We have to make sure we build something different and differentiated.
Amazon’s approach is to be a scale player – create a system that has a huge commodity business and then customers do the work themselves. It’s a bit of a do it yourself deal – you login to their world and do it their way. Our approach is very different – we’ll do the work for you. So if a customer wants help they should pick us; for customers that want to do it themselves and get the rock-bottom service price they should pick Amazon.
Your latest financials are about to be released. Are you happy with the way the company is growing?
We live in a world where the headlines are pretty dismal. We’re doing stuff that customers care about so they’re buying more from us. Our industry represents a paradigm shift in how technology’s going to be consumed so we have a lot of natural factors that give us a lift relative to the rest of the world. So we’re pleased. All this talk about what’s happening in the market – ultimately customers will decide who wins. It’s not the Rackspace or Amazon strategy that’s going to win it. It’s about what the customer thinks, does and experiences.
