
Rackspace is probably screwed
And so is anybody that runs a business that depends on capital investment in computer equipment. Getting "premium service" is exactly the opposite of what a competent IT team wants -- it usually means vendor lock-in and another IT weenie in the decision pipeline.
Amazon, Google, and Microsoft buy such a large percentage of server hardware directly from the ODMs that they are suffocating the OEMs too. Apple is doing the same thing on the consumer side.
What we're seeing here is the proper commoditization of computing and the formation of a modern Standard Oil.