Rackspace reviews: From exploration to experimentation
By Carol Ko 29-Dec-2010
In 1998, Rackspace Hosting started to provide dedicated hosting service, which was seen as a forerunner to private cloud. In 2005, Rackspace launched Mosso (which competed with Amazon's Elastic Compute Cloud) that marked the first public cloud service offering of Rackspace.
Today, Rackspace has nine data centers worldwide, with one data center in Hong Kong. The company maintains 63,996 servers with more than 118,000 customers, who subscribe to the company's dedicated, private and public cloud services.
|"We will be looking to expand our data center footprint toward the end of 2011 or beginning of 2012." |
-- Jim Fagan, VP, managing director, Asia Pacific, Rackspace Hosting
The biggest news from Rackspace in 2010 was the launch of OpenStack in July, a collaboration effort with NASA, together with Citrix, Cloud.com, Cloudkick and PEER 1. OpenStack is a free and open source code repository for companies and individual software application developers to contribute towards.
In November, Rackspace launched a product called Hybrid Connect, which allowed customers to operate a dedicated private cloud while enabling it to "seamlessly burst" into the Rackspace public cloud for scalability and instant deployment of public cloud services.
Below is the excerpt of an interview between Jim Fagan (picture) and Asia Cloud Forum. Fagan is vice president, managing director, of Rackspace Hosting Asia Pacific. The interview chronicles Rackspace's major acquisitions since 2008, latest business results forecasts, and the different states of cloud computing adoption in the Asia Pacific.
Asia Cloud Forum: What percentage of budget does your company put into the R&D of cloud products last year? How will it change in 2011?
Jim Fagan: As a hosting and cloud specialist our entire R&D is targeted towards our cloud products and services. There is also focus is also in acquiring complementary technologies and expertise as shown by our acquisitions of Slicehost and Jungle Disk in 2008 and our recent purchase of CloudKick in December 2010. R&D investment will only increase in 2011 as we plan to reinvest a disproportionate amount of our planned growth into our cloud product and services.
Any plan to build new data centers in Asia in 2011?
Fagan: As demand continues to accelerate in Asia, and with the impending rollout of the Rackspace public cloud in region we will be looking to expand our data center footprint toward the end of 2011 or beginning of 2012. At this point the number of facilities and location has not been decided.
By what percentage has cloud computing/ cloud services contributed to the overall revenue in 2010? Do you expect any change in 2011?
Fagan: Our growth rate in our overall business was 23% Y/Y in Q3 2010. Our leading driver was our public cloud services which grew at 78% over the same time frame.
"We have definitely seen a shift from an exploration of cloud computing to experimentation."
-- Jim Fagan, Rackspace Hosting
Rackspace recently surpassed the 118,000-customer milestone -- this growth is predominantly due to widespread traction for the cloud computing delivery model within real world enterprise IT stacks. Public cloud customers reached over 99,000 cloud customers in Q3 2010.
Rackspace is expanding its cloud computing presence globally in markets where cloud demand is growing rapidly -- this includes replicating the US public cloud infrastructure in the UK in January and a cloud facility in Hong Kong to follow later in the year. We look for these activities to create accelerated growth in 2011.
What is the current state of cloud computing adoption in Asia?
Fagan: The current adoption of cloud computing in Asia is behind North America and EMEA at this point. This is due to a combination of less products and services available in the region and perceptions around security and asset ownership. However, over the past 12 months there has been acceleration in the adoption as more products and services enter the market and customers understand the benefits cloud computing can provide.
Australia and Japan are most mature in the adoption at this stage in Asia. Japan in particular has had major investment from local IT firms into cloud over the past two years and these efforts have been heavily supported and encouraged by the government.
Which industry vertical and country in Asia will your company target your marketing activities for cloud in 2011?
Fagan: Our hosting and cloud solutions are not vertically targeted but are more dependent around use case. Rackspace believes that the cloud "Is for everyone, but not everything, yet." Based on this we will be marketing to all verticals throughout the region.
What have been your customers' three biggest concerns about cloud computing/ cloud services in 2010? How have you addressed their challenges?
Fagan: Security: Customers are still concerned about security of public cloud. With the introduction of our Hybrid Connect offering we have provided customers with the security of a private cloud for their sensitive data while allowing them to utilize the benefits of public cloud scalability and economics.
Service: Most of the cloud computing offerings in the market today offer low or no SLAs with minimal customer service. Rackspace is bringing our industry leading hosting SLAs and support to all of our cloud offerings allowing customers to utilize cloud computing.
Vendor Lock-in: One of the values of cloud computing is the ability to move between vendors as needed and chose best of breed solutions. Customers are increasingly concerned that as vendors come out with proprietary clouds they will in effect be "lock-in" which will severely limit the value cloud computing brings. By leading the OpenStack project and supporting open cloud standards Rackspace is trying to foster ubiquitous standards that will provide customers with multiple choices in cloud computing options and flexibility.
What specific trends in cloud computing have you observed in the past year?
Fagan: In speaking with our customers and prospects we have definitely seen a shift from an exploration of cloud computing to experimentation. As the offerings continue to increase and mature CIO's are beginning to test applications in cloud environments and put together migration plans to further take advantage of cloud computing.
From a Rackspace perspective we are very excited to be leading and part of the Openstack project. By having a ubiquitous standard for cloud we hope this will enhance adoption and development of cloud technologies by removing the fear of vendor lock in.
What specific trends in cloud computing do you foresee for the next three years?
Fagan: Industry analyst house IDC estimates that the cloud services market was worth US$17 billion in 2009 -- it further projects it to swell to US$44 billion by 2013 at a compound annual growth rate of 26%. From Rackspace's perspective, we think that this is a conservative estimate as we continue to experience a groundswell of interest from our customers for outsourced software application hosting.
A few discussions about cloud compliance and industry standards are going on in the ICT community at present. What's your take on this?
Fagan: Rackspace along with other industry leaders such as Microsoft, Cisco, NetApp, EMC and Reach are founding members of the Asia Cloud Computing Association. Rackspace believes that it is critical for industry leaders to work together customers and governments to provide standards and compliance regulations on cloud computing. Getting this correct at the outset will help accelerate the adoption and investment in cloud computing.
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