The company has been adding data center space across major markets in the U.S., as well as in Europe and Asia-Pacific. In the latter region, its focus has been on Australia and Hong Kong.

by Yevgeniy Sverdlik on August 19, 2014


One of the hottest markets for Rackspace today is Australia – a market where the company has only been since about two years ago. Rackspace chief operating officer Mark Roenigk said business was strong there and the provider is expanding capacity to support the demand.

Rackspace has about 2 megawatts in its Sydney data center and eyeing addition of another 2 megawatts on the same campus.

Demand drivers in Sydney are similar to those the company is observing in the U.S. There are many new businesses getting off the ground, using a cloud-only infrastructure strategy. There are also lots of enterprises with headquarters in Australia’s most populous city that opt for hybrid infrastructure, putting the “crown jewels” on dedicated servers and using Rackspace’s public cloud to burst capacity.

In Asia, Rackspace finished an expansion project at its Hong Kong site about one year ago and is eyeing another location, potentially another one in Hong Kong or, alternatively, one in Singapore.

Europe is another new market for Rackspace. Construction is in full swing on the 130,000-square-foot project in Crawley, U.K., which Rackspace is co-developing with Digital Realty. The first 10-megawatt building is not even finished, but the project has already received two sustainability awards, Roenigk said, sounding amused.


Rackspace is also growing its data center footprint across multiple major markets on its home turf in the U.S. It has recently taken down an additional 8 megawatts of capacity at the DuPont Fabros campus in Ashburn, Virginia, as it prepares to bring online between 3 megawatts and 6 megawatts in the Dallas market and weighs expansion options on the west coast.

Rackspace is considering two primary options for the west coast expansion: a greenfield development in Boardman, Oregon, where it bought a 200-acre property about three years ago, and acquisition of a fully built data center in northern Nevada. Roenigk declined to provide any details on the Nevada facility, saying only that the company was currently going through a due diligence process for the potential deal.

One of the considerations playing a role in the decision is availability of renewable energy. The Boardman site has access to hydroelectric energy, which is abundant in Oregon, while in Nevada the company would have to pay for renewable energy that will be fed into the common grid and use power from the grid, which has a mix of sources.

If there is urgent need to expand west coast capacity, Rackspace may also simply take more space with one of its existing providers.

West coast plays an increasingly important role for Rackspace, whose business for the first decade of existence was driven primarily by east coast and Midwest customers, Roenigk said. He attributes this trend to “mostly just the number of new startups on the west coast.”

The amount of servers Rackspace deploys to serve its customer base grows every quarter. Its server count at the end of the second quarter was about 108,000 – up from about 106,000 at the end of the first quarter. The company has recently adjusted its business strategy to a certain extent, placing an emphasis on providing managed services along with cloud infrastructure. It has also recently overhauled its bare-metal cloud offering. OnMetal (the new bare-metal cloud service) was originally rolled out in northern Virginia and Dallas is next up. If the changes prove to be successful – the OnMetal business is growing nicely, according to director of infrastructure strategy Aaron Sullivan – its server count will only grow, and so will its data center footprint.