Rackspace Clears Up Confusion: It is Not Getting Out of IaaS Market

Rackspace announced in July that it would no longer provide bare Infrastructure-as-a-Service. Every flavor of IaaS the company offers would come packaged with some level of managed services. After the announcement, several articles surfaced online proclaiming – either out of confusion or to get attention – that Rackspace was getting out of the IaaS market.

That of course is not true, and the company’s CTO John Engates took to its official blog to dispel the rumors. The truth is that Rackspace is getting out of the business of providing raw, commodity cloud infrastructure services, where it had been competing with a number of giants locked in a vicious price war: Amazon, Google and Microsoft. Instead, the company has decided to leverage its reputation of “fanatical support” to differentiate its cloud with managed services.

Engates discourages users that want the raw cloud compute, storage and network resources from turning to Rackspace. “If you’re looking for raw infrastructure that you have to manage yourself, we may not be the best provider for you,” he writes.

“We’re not interested in offering pure commodity cloud Infrastructure-as-a-Service with no support. Instead, we offer cloud IaaS that comes standard with built-in managed services to help our customers manage that infrastructure. IaaS is and remains a critical component in the Rackspace managed cloud.”

Rackspace is after a very specific cloud user – a cloud user that does not have (or does not want to have) the resources to manage their cloud infrastructure. Gartner recently named Rackspace leader in the managed cloud market. The company has already done well in this market niche, and July’s announcement was simply an attempt to solidify its identity as major player in this space.