Rackspace is not the company it once was. Having hit severe headwinds with its single focus approach the firm is changing tack.
2014 has been an interesting year for Rackspace. In March the company put a ‘For Sale’ sign up and removed it in October having chosen to go it alone.
November saw it report Q3 profit of $26m up from $16m in 2013’s Q3 and revenue of $459.8m up from $388m a year earlier. For Q4 2014, Rackspace said it expects revenue of $469m to $476m.
CBR, Q: What is Rackspace?
Jeff Cotten: As we become a services company – which is what we are at heart – it is about widening our portfolio to include other types of workloads, types of cloud infrastructure as well as going much deeper into areas like ecommerce.
So partners become tremendously important – Magento for example is a tremendous partner for us in the ecommerce space. More and more Microsoft is becoming a strategic partner for us. We launched services on top of Hyper V so we can add an additional virtualisation layer into our portfolio. We also launched a relationship with Google so we’re now providing capabilities on top of Google apps.
Our aspiration is to provide an agnostic set of flexible options for our customers so they are not pigeonholed into Microsoft, Vmware or Openstack. We’re going to offer flexibility for them to plug into that platform layer so we have those partnerships with Microsoft, Google and VMware.
Then we also have specific application stacks with the primary focuses on content management, ecommerce, big data – those are the ones we talk about the most. In big data we offer, MongoDB, Hadoop and MySQL.
Same thing in the ecommerce world. We’re focused on Magento and will look to extend that to others as we deepen that stack.
So for us it about being in the platform layer as well as in specific application verticals.
CBR: How are you taking it to market?
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GC: The channel becomes more important to us. We’re predominately direct today and this is a great opportunity. We hired Bill Knight from Microsoft to run our channel programme globally. His focus is to extend our channel. Today our opportunity is to extend it through digital agencies. These are companies that don’t want to focus on all the different infrastructure technologies. They want to focus on delivering to their clients enriched application experiences and leveraging Rackspace to do all the back end infrastructure work. They are one of our biggest sources of business for us today.
What is interesting is if you look at a company like Microsoft – and remember Rackspace is a huge channel for Microsoft as we sell a lot of Microsoft software – as they build out their cloud platform the question becomes are they going to compete with their channel partners or are they going to enable channel partners to provide that service layer on top.
We obviously want to be one of the contenders to provide that service layer on top of various infrastructures so we don’t want to create the same problem.
We won’t for example want to create the rich digital interactive business so we will avoid competing with our partners.