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September 8, 2022
True to its word, Rackspace Technology is making big investments to propel its cloud services strategy — specifically, this time, in terms of private cloud. Thursday’s announcement of the Rackspace Accelerated Migration Program marks a significant shift from just a few months ago, when the company planned to divest its private cloud assets.
Now, the giant managed cloud computing provider, which sells through the channel, instead plans to entice customers to the private cloud through the Rackspace Accelerated Migration Program.
The company didn’t say exactly how much money it’s putting into the Rackspace Accelerated Migration Program. But it did say it’s a multimillion-dollar initiative. That amount tracks with what Amar Maletira, president and CFO, told analysts on Rackspace’s second-quarter earnings call.
“[W]e are planning $15 million-$20 million of investments in the quarter to support … the growth acceleration in cloud services,” Maletira said on Aug. 9.
That was also the day industry observers learned Rackspace would, in fact, not sell off its private cloud assets. Instead, Rackspace now plans to split its public and private cloud businesses into separate divisions. The company was planning to share more details during its analyst day this month. It remains unclear if that event will take place.
“[W]e look forward to sharing more details on the financial profiles of both the public cloud and private cloud businesses,” Maletira said in response to an analyst’s inquiry about Rackspace’s analyst day. “And currently, we are deep into the detailed planning of this realignment … and we’ll begin the early stages of implementation of the new operating model in our fiscal Q3.”
The Rackspace Accelerated Migration Program appears to be the company’s first major step toward that goal. Channel Futures has asked Rackspace for more details on the effort, especially as it impacts channel partners. Rackspace sells through agents, resellers, consultants and some managed service providers. It’s not yet clear how partners might take advantage of or benefit from the Rackspace Accelerated Migration Program.
Even so, channel partners will want to better understand the new effort. Rackspace said it designed the program to help customers move applications from on-premises or colocation facilities into the private cloud. Rackspace teams with VMware and OpenStack to deliver private cloud services.
With that in mind, the Rackspace Accelerated Migration Program provides dedicated technical expertise through its engineers. Customers can access that expertise on demand. As a result, clients with workloads on virtual machines or bare-metal compute get more cost efficiency and improved resiliency compared to the public cloud. In addition, Rackspace Accelerated Migration Program users will receive financial assistance, though to what extent remains unanswered. Channel Futures will publish a follow-up to this article as able.
Josh Prewitt is Rackspace’s chief product officer. He said the Rackspace Accelerated Migration Program meets customers where they are in their cloud journeys.
Rackspace’s Josh Prewitt
“Many organizations are under pressure to lift and shift into the cloud but are wary of managing costs and maintaining control,” Prewitt said. “With Rackspace AMP, we can take care of the move to the private cloud for them, so they can run their systems at a reasonable rate, in a controlled environment, with lifecycle management baked in.”
To be sure, the new effort highlights Rackspace’s renewed focus on private cloud — the practice it was ready to jettison to a potential buyer. Prewitt peripherally addressed that strategy shift in his prepared statement.
“We are very proud of the work we have done to bring more organizations into the public cloud, but there are many customers for whom the public cloud may not be the right strategic or financial choice,” Prewitt said. “With this initiative, we are applying the same capabilities that have been recognized as best-in-class by our hyperscaler public cloud partners to the private cloud, helping customers accelerate their digital transformations and elevate their important workloads.”
Contributing Editor, Channel Futures
Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.
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