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Hewlett Packard Enterprise (HPE) and Rackspace have partnered to offer OpenStack Private Cloud with a pay-per-use infrastructure and delivered as a managed service.

With this service, enterprises will get the benefits of a public cloud – cloud-like utility pricing, elastic infrastructure and simplified IT – in a private cloud environment in their data center, a colocation facility or a data center managed by Rackspace, the companies said. Customers will pay only for what they use, allowing them to handle unpredictable growth and bursts in workloads without paying for fixed capacity.

Rackspace’s Scott Crenshaw

Scott Crenshaw, Rackspace‘s executive vice president of private cloud, tells Channel Partners that HPE and Rackspace are “setting the new standard for what private cloud looks like and in doing so we think this is the way that every customer will want to consume private cloud in the figure.”

“And clearly for the partner community this is an opportunity to help create that future for their customers,” he said. “The biggest benefit to the partner is that … this keeps them very relevant to their customers. This offering allows them to meet the emerging cloud needs of their customers, and to do so in a really strategically important way that has substantial value-add to the customer.”

The offering was designed with partners in mind, and the value proposition for the partners is existential, Crenshaw said.

“If the partners aren’t able to participate fully in the private-cloud model, then the money’s going to flow into public cloud, and most partners aren’t really equipped to monetize that with good margins or monetize that at all in many cases,” he said. “And so what we offer is the ability for partners to stay relevant to their customers and to help them capture the infrastructure and services revenue for an increasing portion of their customers’ IT spend. It sort of future-proofs the partners’ business model.”

According to IDC FutureScape: “Worldwide Datacenter 2017 Predictions,” pay-as-you-go consumption models will account for half of on-premises and off-premises physical IT and data-center asset spending by 2018.

“As enterprise organizations continue to invest in both on-premises and hosted private cloud capabilities, they are increasingly incorporating a richer set of cloud services,” said Michelle Bailey, IDC’s group vice president, general manager and research fellow.

The offering will be generally available in all regions on Nov. 28, with additional solutions for Rackspace Private Cloud powered by VMware and Rackspace Private Cloud powered by Microsoft Azure Stack expected in 2018.

“The launch of OpenStack Private Cloud with pay-per-use infrastructure, delivered by Rackspace and HPE, marks a pivotal moment in the private cloud market and in the industry at large,” said Antonio Neri, HPE’s president. “This experience is the best of the cloud and on-premises worlds, and we fully expect this simple pay-per-use technology model to change the way enterprises make technology decisions.”