Cloud Channel: Rackspace Cites Partners In Q2 Growth
Rackspace thinks highly of the channel. That’s one key takeaway from the company’s recent earnings call for the quarter ended June 30. Lanham Napier, Rackspace’s president and chief executive officer, praised the economics of channel sales versus the cost of expanding Rackspace’s market reach on its own. Here are the details.
“We create a force multiplier with channel partners,” he said.
Bruce Knooihuizen, Rackspace’s chief financial officer, said channel partners represent a significant portion of new wins, adding the company is attracting more channel allies. In Q2, Rackspace entered arrangements with Ingram Micro and XO Communications. Ingram Micro provides Rackspace’s managed hosting and cloud computing services to the distributor’s North American channel partners. Ingram’s Seismic Cloud Conduit Program serves as the vehicle.
The alliance with XO Communications, meanwhile, involves replacing all of the communication service providers’s internally hosted IT offerings with Rackspace products and services, according to Knooihuizen. Rackspace will go to market through XO Communication’s 400-person sales force, he added.
Rackspace late last year retooled its channel initiative, creating a four-tiered program and clarifying its partner compensation approach. Robert Fuller heads Rackspace’s worldwide channel.
In other developments:
- Rackspace’s enterprise business generated record sales in June, with customer signings including Salesforce.com
- The company’s launch of OpenStack, an open source cloud platform, presents an opportunity to create technology parity and cloud standardization, Napier said. This will maximize Rackspace’s ability to compete on service, he noted.
- Rackspace’s Q2 revenue grew to $187.3 million, a 23 percent uptick compared with the year earlier quarter. Net income saw a 60 percent increase to $11.2 million from $7 million last year.
Analysis: Rackspace’s channel efforts could help support the company’s enterprise push — partners can lend a hand with the complex IT requirements of larger organizations. And lowering the cost of sales via the channel may boost the company competitively as it takes on Amazon and other cloud providers.