back to article Sales up, profit up, but no champagne corks popping at Rackspace

The gods of tech sales finally smiled on Rackspace in calendar Q2 of 2015. But the biz isn't celebrating just yet, because it's public cloud arm is stuck in first gear. The cloud server-hosting biz reported an 11 per cent year-on-year growth in turnover to $489.4m (£314.2m) in the three months ended 30 June. Total costs and …

  1. Rainer

    Why?

    Is there an actual advantage using Rackspace instead of Amazon (or Microsoft (Azure))?

    From my (limited) point of view, all are US-based companies with US staff all bound to US laws. Even if some DCs are in Europe or elsewhere.

    Or is it all in the support?

    FD: I work at a regional (Swiss) ISP and support, speed, flexibility is probably one of our strengths.

    Price isn't, of course.

    I hope Rackspace doesn't try to compete with Amazon on price. That would be silly.

    1. Probie

      Re: Why?

      No they are not ALL US based, they have separate corporate entities across the world such as Rackspace LTD UK. All that said I am not sure what happens legally with respect to handing over of data, especially on (USA perspective) foreign sovereign land.

      Rackspace have already said they will not complete on AWS on price and I think in the earnings call there was mention of reselling AWS or at least getting the staff AWS trained.

      "We have deployed a team that is building the market-leading offering for customers who want specialized expertise and Fanatical Support on the AWS cloud"

      - From the mouth of Mr Rhodes., taken from the transcript of the RAX 2015 earnings call posted on seekingalpha.com

      But now that makes things really confusing. Personally (and as much as I root for the techies) my view is that they just flat loose to AWS, Azure, GCE, Digital Ocean etc ... on any measurable or meaningful statistic. RS do not Innovate fast enough or wide enough, execution of an idea is like an octogenarian running a marathon etc ....., when compared to any other large public cloud vendor. The vision also seems to be as flaccid as a punctured member. In the space of three years, " Largest Open Source Public Cloud provider" to "Someone please buy me as a part of my strategy" to "Leverage other public cloud and put a IT support desk on it". Not something to grab your attention in an excitable must "play with the stock" manner, certainly enough to make me think four to five times before I host anything of worth with them. I mean really the "vision" seems to be "survive at any cost" and not "create and sell value".

      I think the stock market has had it in for them as some personal grudge, but on this occasion Rackspace got hammered bang to rights.

      Now do not get me wrong, they do try for the customer and will go way beyond the corporate line to make sure a customer is happy. All laudable efforts, but it counts for shit if the upper management do not have a handle on the costs and controls and the sales etc ....... The leaders ask the employees to trust them to lead. It seems a shame (and the earnings call and the analyst all seem to line up on this) that the leaders cannot return that epic amount of faith by actually leading.

      I should mention many years ago I used to work for Rackspace.

      So in short to your Why? I wouldn't they do not engender enough ... well anything really.

  2. Anonymous Coward
    Anonymous Coward

    Rackspace; A Castle Built on Sand

    So as many of us already knew, and as the story pointed out, some of the best talent has left Rackspace in recent years. Some of their higher ups (most trusted tech employees) are generally what we would consider as being bottom of the barrel. They still beat their chest and talk a good game, but most of it seems vaporous. Customer reviews of Rackspace have been falling in recent years.

    So, a few years ago they tried to sell, but nobody wanted to buy. And now, they seem to try to re-invent themselves by partnering with MS and Intel--good luck with getting squeezed by these two two.

    And Rackspace's over reliance on "me too" type strategies such as OCP could potentially be their downfall. As the Register has pointed out recently, OCP seems to be a low quality and untested "joke". And smart money has steered clear of OCP. Mainly Google and Amazon who appear to have killer cloud infrastructures.

    Bottom line here is quite simple. Rackspace really needs to up its game and/or re-invent itself. Otherwise, they will soon become a failed company as they simply are not competitive with the big boys.

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