Rackspace's real strength is in their managed services. Either with a managed dedicated server or managed cloud account. The level of support and assistance you get is something that isn't even available from Amazon, Google, etc. It seems, however, that Rackspace is feeling the pressure from both large and small players and some businesses go with Amazon, Google, etc and do all the OS and stack management in house while others go with the lower end (features/price/SLA) of a Digital Ocean or similar.
Don't get me wrong, I think there's a place for all of them, and actually use both Digital Ocean as well as a Rackspace managed dedicated and cloud setup. But I think a lot of people are buying based on price and just accepting a lower level of support in the process. Oddly, some folks seem surprised by the lower level of support of some of these services (no phone support, lesser monitoring, increased downtime, backups that are lost when the node fails, etc), even several HN posters when these services have issues.
Given that, maybe one of the big players who want an entry in to the hybrid cloud/enterprise cloud space could use Rackspace's popularity as an entrypoint.
I am a huge fan of Rackspace. They're a bunch great people who sure have a refreshing view on how to take care of their employees, their community, and their visitors.
If your whole business relies on staying in step with giant competitors with huge piles of money thrown off from other successful ventures to lower their costs and prices more aggressively then you can, it's going to be an ugly business in the long haul.
Price is a terrible competitive advantage because unless you have a revolutionary cost structure to go with it, you're hosed once someone does something reckless, like lowering below cost to drive you out of business.
Google and Amazon aren't going anywhere because they own search and ecommerce. Hosting and infrastructure are nice businesses for both companies, but they are fine without it. Rackspace without hosting and infrastructure revenue is not a company.
I love Rackspace. I was looking forward to being a happy Rackspace customer until I was old and gray. And all the things I love about them would be the first things to go after an acquisition.
Are they having a hard time selling that's why it is out there? You would think some of these companies you read saying things like "we missed the cloud" would jump at this.
Really nobody left, RAX is too big and requires another public company, mainly a blue blood to acquire them. IBM got Softlayer. Google, Amazon, and Microsoft obviously have their own clouds. RedHat has its own PaaS OpenShift. Awkward spot really. Perhaps Facebook wants to join the cloud hosting business, but I doubt it, since they've just coughed up insane amounts of cash with Oculus and whatsapp.
Smart play though, Morgan Stanley will figure out the details and likely find a buyer eventually. MS is kind of like `The Wolf` from Pulp Fiction or Mike Ehrmantraut from Breaking Bad, no questions asked problem solvers.
Mailgun cofounder checking in: we will, and yes - we will. ;-) Rackspace has been a great home for our team, we continue to grow nicely, we're funded very well and plenty of exciting things are on the roadmap.
Rackspace should have invested more in PaaS. Its only offering that could it semi-accurately call PaaS, Cloud Sites, is lacking - it supports few runtimes, without things like git-based deployment that would enable it to fit into a CI Pipeline, and it seems intended to host static websites with some dynamic features rather than full-fledged web applications.
I think they are also failing by trying to differentiate themselves in a business that will end up being much like a utility. When your business acts like a utility it's kind of a race to the bottom on prices. Furthermore, in attempting to differentiate themselves, they failed to characterize their primary customer properly - the kind of person who interacts with RackSpace directly is not the kind of person who calls support a whole lot, and yet the quality of their managed support seems to be their sole differentiating factor. My company did take advantage of managed support a few times, and when we did so it was enormously helpful, but it wasn't enough to keep us there when we saw lower-cost offerings elsewhere, because we have enough expertise in-house to solve 99% of problems that come our way.
That said, I own RAX and I would very much like to see the stock stop tanking. An acquisition proposition could send the price back up to near where I bought it - and who knows? Maybe I'll end up trading it in for some more AMZN ( a stock that has also been tanking, by the way.)
For myself, I greatly appreciate having a service like Mailgun available to Rackspace customers - does Linode (or another company) have a similar e-mail service?
Why? Stock price seems to be completely independent from actual performance; and even then, This is just a consequence of speculation, not any actual change in anything. Basic financials look tip-top. OpenStack infrastructure means you're probably not locked in.
Seems like a lot of work for something that may, incredibly hypothetically, be a bad thing. Based on a single news item, you're betting on not only a one-sided partnership, but one that somehow destroys your ability to use the company, in a bet that only makes sense to hedge against now if somehow in the future any of the things that make it easy to step away from a hypothetically-future-toxic-Rackspace are no longer true.
You should also consider the growing number of platform (PaaS) providers that make it super easy to manage the infrastructure yourself, and save you lots of money on the way. I believe that this is where most hosting providers are heading. Gone are the days that we should be dealing with infrastructure at the element level. While this is the wrong forum to list who to look at, if you have a Ruby on Rails app, look at Heroku or Ninefold
They're fine financially. >$300M Cash, $70M of debt (most of which are capital leases). They say they've been approached by "multiple parties" so it's just a matter of trying to get the best offer. http://www.sec.gov/Archives/edgar/data/1107694/0001107694140...
[+] [-] JohnTHaller|12 years ago|reply
Don't get me wrong, I think there's a place for all of them, and actually use both Digital Ocean as well as a Rackspace managed dedicated and cloud setup. But I think a lot of people are buying based on price and just accepting a lower level of support in the process. Oddly, some folks seem surprised by the lower level of support of some of these services (no phone support, lesser monitoring, increased downtime, backups that are lost when the node fails, etc), even several HN posters when these services have issues.
[+] [-] imsofuture|12 years ago|reply
[+] [-] nickstinemates|12 years ago|reply
I am a huge fan of Rackspace. They're a bunch great people who sure have a refreshing view on how to take care of their employees, their community, and their visitors.
[+] [-] akurilin|12 years ago|reply
[+] [-] programminggeek|12 years ago|reply
Price is a terrible competitive advantage because unless you have a revolutionary cost structure to go with it, you're hosed once someone does something reckless, like lowering below cost to drive you out of business.
Google and Amazon aren't going anywhere because they own search and ecommerce. Hosting and infrastructure are nice businesses for both companies, but they are fine without it. Rackspace without hosting and infrastructure revenue is not a company.
[+] [-] smacktoward|12 years ago|reply
I love Rackspace. I was looking forward to being a happy Rackspace customer until I was old and gray. And all the things I love about them would be the first things to go after an acquisition.
Aaaaaaaaaargh.
[+] [-] dredmorbius|12 years ago|reply
[+] [-] olegp|12 years ago|reply
[+] [-] yuhong|12 years ago|reply
[+] [-] us0r|12 years ago|reply
Are they having a hard time selling that's why it is out there? You would think some of these companies you read saying things like "we missed the cloud" would jump at this.
[+] [-] nodesocket|12 years ago|reply
Smart play though, Morgan Stanley will figure out the details and likely find a buyer eventually. MS is kind of like `The Wolf` from Pulp Fiction or Mike Ehrmantraut from Breaking Bad, no questions asked problem solvers.
[+] [-] badamson|12 years ago|reply
[+] [-] Oculus|12 years ago|reply
[+] [-] old-gregg|12 years ago|reply
[+] [-] bbunix|12 years ago|reply
Glad we moved everyone off to AWS... pricing is an issue - everyone is lowering prices dramatically... tough market.
[+] [-] rhizome|12 years ago|reply
[+] [-] dvanduzer|12 years ago|reply
[+] [-] Aqueous|12 years ago|reply
I think they are also failing by trying to differentiate themselves in a business that will end up being much like a utility. When your business acts like a utility it's kind of a race to the bottom on prices. Furthermore, in attempting to differentiate themselves, they failed to characterize their primary customer properly - the kind of person who interacts with RackSpace directly is not the kind of person who calls support a whole lot, and yet the quality of their managed support seems to be their sole differentiating factor. My company did take advantage of managed support a few times, and when we did so it was enormously helpful, but it wasn't enough to keep us there when we saw lower-cost offerings elsewhere, because we have enough expertise in-house to solve 99% of problems that come our way.
That said, I own RAX and I would very much like to see the stock stop tanking. An acquisition proposition could send the price back up to near where I bought it - and who knows? Maybe I'll end up trading it in for some more AMZN ( a stock that has also been tanking, by the way.)
[+] [-] unknown|12 years ago|reply
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[+] [-] unknown|12 years ago|reply
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[+] [-] bruceb|12 years ago|reply
[+] [-] 127001brewer|12 years ago|reply
[+] [-] lvh|12 years ago|reply
Seems like a lot of work for something that may, incredibly hypothetically, be a bad thing. Based on a single news item, you're betting on not only a one-sided partnership, but one that somehow destroys your ability to use the company, in a bet that only makes sense to hedge against now if somehow in the future any of the things that make it easy to step away from a hypothetically-future-toxic-Rackspace are no longer true.
This is a good thing, not a bad one.
[+] [-] supercoder|12 years ago|reply
We've been able to lower prices by 75% due to actual lower cost as well as requiring fewer machines because of the increased performance.
[+] [-] AJ72|12 years ago|reply
[+] [-] jamesjporter|12 years ago|reply
[+] [-] tzakrajs|12 years ago|reply
[+] [-] unknown|12 years ago|reply
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[+] [-] rurounijones|12 years ago|reply
Is Rackspace actually in financial trouble? Or is it a case of shareholders moaning that their returns aren't good enough?
[+] [-] badamson|12 years ago|reply
[+] [-] hackaflocka|12 years ago|reply
god/alternative-deity help them.