22-12-2015, 07:37 #1
[EN] Rackspace: Goldman Starts at Hold as Cloud Threatens their ‘Dedicated’ Business
Public cloud competition has been impacting Rackspace's dedicated cloud, which saw 20 percent growth in 2012, 11 percent in CY2013 and 12 percent in CY2014. However, the dedicated cloud business is expected to decelerate to 9 percent year-on-year in 2015.
By Tiernan Ray
December 21, 2015
Goldman Sachs’s Heather Bellini today initiates coverage of data center hosting outfit Rackspace Hosting (RAX) with a Neutral rating, and a $27 price target, arguing that the shift to public cloud resources, such as Amazon.com’s AWS and Microsoft’s Azure, will continue to pressure the company in the form of thing such as price competition.
Cloud has become a “battle of the titans,” between the big providers, she observes, making it harder and harder for Rackspace to compete.
Writes Bellini, “We view increased competition in the public cloud market continuing to compress RAX’s public cloud revenue growth (30% of sales, CY14), as it decreased from 60% YoY in CY12 to our estimate of 17% in CY15.”
Bellini even thinks the public cloud will hurt Rackspace’s bread and butter, the 70% of its revenue that come from “dedicated cloud.” Although partnerships with Microsoft and AWS will help Rackspace, “We don’t expect it to be material for several years,” she writes.
Bellini doesn’t go into detail as to how she thinks the dedicated business, where Rackspace runs a server computer devoted to one customer, will be hurt. By she expects Rackspace’s sales in the category to trail overall growth in the category for the market. For instance, for 2015, Bellini models Rackspace making $1.367 billion on dedicated services, better than the 5% growth in the segment . But for 2014, she models the company having growth of just 8.6%, versus 10% growth for the dedicated market overall.
Última edição por 5ms; 22-12-2015 às 07:50.
22-12-2015, 08:00 #2
Interview: Rackspace CTO John Engates on why hybrid cloud matters
24 Nov 2015
There is no single cloud. Businesses typically have some applications deployed on physical server hardware, some are virtualised, while others might be accessed as services on a public cloud such as Amazon Web Services (AWS) or Microsoft Azure.
With organisations beginning to see the benefits of infrastructure as a service (IaaS) and platform as a service (PaaS) in the public cloud, the definition of a private cloud has changed. It is no longer about a bunch of virtual machines (VMs) in the datacentre.
Now customers want to run applications in multiple clouds, according to John Engates, CTO of Rackspace. “Our business is to make it easy for our customers to deploy technology,” he says.
Among the complexities that IT departments are currently facing is that as more IT is commissioned and run by other parts of the business, these new systems are not deployed in the company’s datacentre.
“A company may hire a digital agency to build a new mobile experience which will only run on AWS. At the same time, the CIO’s world includes Microsoft Azure because he bought a bunch of Microsoft Enterprise licences and he has an ageing datacentre where those applications are being used. At Rackspace, we are embracing the idea of multiple clouds in the enterprise,” says Engates.
Build a digital experience
Many companies are writing their own software to differentiate their digital experience, he says. Logically, it makes sense to run these new applications on the public cloud, but security concerns and regulatory requirements impose restrictions.
“The customer wants to have some control. They may want to run it in their own datacentre because the public cloud is not always right for every application. Private clouds enable organisations to gain some of the advantages of the public cloud without the perceived risks.”
In this private cloud space, OpenStack is often compared to VMware. But, according to Engates, if you are a software developer writing a modern web or mobile application, you are much more likely to perceive OpenStack as a real cloud than VMware. Why? Engates argues that VMware was initially positioned as technology to virtualise physical hardware, while OpenStack is for the developer who needs an application programming interface (API) for automating his application deployment process.
According to Engates, developers want an AWS-like experience for their applications – in other words, programmable DevOps.
OpenStack is not easy
Among the challenges for OpenStack is that it is regarded as complex technology.
“The early adopters of cloud have been smaller companies with a lot of technical acumen,” says Engates. “They roll up their sleeves and figure it out for themselves without a manual or service provider.”
But the cloud is applicable to businesses of all sizes, from startups to the largest enterprises, so there is an opportunity to make OpenStack easier.
Certification is an important step in the adoption of a technology, as is the case with Cisco, EMC and Microsoft certifications. “All these big companies know they need a lot of trained professionals to help organisations implement [the products] and make the adoption easier.”
Engates welcomes the Certified OpenStack Administrator (COA) certification programme, unveiled at the recent OpenStack Summit in Tokyo, which aims to bridge the OpenStack skills gap.
Arguably, the idea of businesses employing a team of certified engineers was a model that worked well 20 years ago. But a private cloud is not a product that ships in a box. It represents a service.
“Rackspace is trying to change the way people adopt OpenStack,” says Engates. “We knew implementing it would be challenging.” Rather than selling a distribution of OpenStack, he says it has “turned it into an as-a-service product where you can get private cloud as a service or public cloud as a service”.
So OpenStack at Rackspace represents private cloud as a service. “Customers do not have to think about training the experts or hiring them.” Instead, he says, they get a turnkey private cloud that is ready to use. This is Rackspace’s managed cloud. That said, Engates believes certification plays an important role in providing a baseline of expertise.
Legacy IT holds many organisations back. This is not necessarily a mainframe, warns Engates – it may be a VMware deployment or Oracle, around which organisations will have hired and built expertise.
Building and deploying new applications is a lot easier than legacy systems. Such systems can be engineered as cloud native to take advantage of the automation and scaling available through OpenStack. But what about older systems that were deployed in a pre-cloud era.
He says organisations need to look at where best to deploy their custom applications. “Rackspace lets you move these applications ‘as is’ to the cloud and run them in a VMware environment or on bare metal. You are getting out of the datacentre business and IT infrastructure business faster than if you held on to all those assets.
“A lot of complexity has built up over the past 20 to 30 years, but people are starting to move away, such as using Box instead of a file server. The tools we used to use for our daily jobs resided on-premise, now they are cloud-based.”
Moving to the cloud is a journey. For Engates and Rackspace, this journey begins with a managed service for hosting bare metal servers, which is what the company is known for. These can then be joined by some VMware instances or an OpenStack private cloud, along with AWS and Azure support for public cloud deployments.
22-12-2015, 08:04 #3
CTO discloses Rackspace cloud plans, challenges for 2016
Rackspace CTO John Engates talks about Rackspace cloud plans for 2016, as well as broader issues around addressing the talent gap and workload portability.
by Trevor Jones
18 Dec 2015
After a shaky 2014, Rackspace regained its footing and went all in on managed cloud this year, with container services and big moves in the form of partnerships with Amazon Web Services and Microsoft Azure.
SearchCloudComputing talked to Rackspace CTO John Engates about the company's cloud strategy for 2016, including further commitments to managing multicloud environments and to its OpenStack private cloud, as well as more features around security and big data.
What are the big themes we can expect from Rackspace in 2016?
John Engates: One of the major things we embarked on in 2015, and will continue to aggressively pursue in 2016, is multicloud managed cloud. Another area we've invested in, and will continue to, is the idea of data services for platforms like NoSQL, Hadoop, Cassandra [and] MongoDB -- emerging data platforms that often require experience the companies don't have.
Private cloud is another area we're excited about and continue to grow. OpenStack has become the standard by which companies measure everything else, and really, it becomes the one most people look to for embracing private cloud -- even if that falls under multicloud. There are no purists just picking one cloud; they often have multiple initiatives. It's just really the way companies are getting to the cloud. There's no single strategy, and often times, it's multiple strategies all executing in parallel. Different divisions are working at different paces, and that's an area where Rackspace is really in a good position to help.
And, finally, security: It's the overarching challenge that many companies are facing with cloud or anything in it.
Can we expect more Rackspace cloud partnerships in 2016 similar to what we saw this year with Amazon and Microsoft?
Engates: We'll go where our customers ask us to go. Rackspace has always embraced the standard open platforms in the market. Amazon is by far the biggest and most influential with customers. Azure is doing well, which it should.
As far as other clouds, I don't want to speculate which ones we [will] look at or where we [will] go next. There are other options out there; it's just most companies have enough going on with one or two to keep them busy.
We don't hear as much about Rackspace's public cloud anymore. With other vendors constantly coming out with new services, how do you keep Rackspace Public Cloud a viable option?
Engates: We've really mastered hybrid cloud, whether it's bare-metal and physical servers, or hosted private cloud like OpenStack. That is something that is unique and valuable to customers on the cloud journey, as they continue to operate in a certain context.
Having VMware next to our public cloud, we see a lot of companies making that transition. They're also building and testing out OpenStack private clouds because of familiar characteristics. We have lots of customers using it, almost like an entry point.
I don't necessarily think our strategy is to try to match Amazon or Microsoft on features. We're carving out what our public cloud is great for -- where it resonates and where to use it -- and part of that is the multicloud strategy. There's not going to be a company that chooses just one cloud.
If people are using your public cloud as an entry point to OpenStack, does that mean your private cloud is a bigger business or priority for Rackspace?
Engates: I wouldn't say bigger. It's just one area where OpenStack as a platform seems to resonate. When you look at the companies offering OpenStack, consuming OpenStack -- the private cloud is the area where it's really successful. So, when we talk about what we're managing beyond just public cloud, it's really just an area that is building steam and something we can add a lot of value around.
One of your predictions for 2016 is there will continue to be a talent shortage, even for vendors. What's your advice for an enterprise operating in Middle America trying to hire and retain skilled employees?
Engates: We've actually been a company that has had to do it ourselves. We're not based on the East Coast or the West Coast. In some cases, that can be a positive, because you're not competing with everyone else. At the same time, there's the reverse problem that there is less talent to be had. It's one of the reasons we created the OpenStack Innovation Center with Intel, and other training for onboarding new talent and creating the talent ourselves.
Many companies are not in the same position to do that ...They might also want to embrace some open source projects. It's a great way to engage a talent base. People love to see their work put out there, and OpenStack has been a big win for us in terms of attracting developers.
Giving employees new ways to learn is a huge way to retain talent. You have smart people, but if you say, 'Work on this project for the rest of the foreseeable future,' it has a way of boxing them in. Most smart people want to grow their skills and capabilities.
Hybrid IT and multicloud deployments became a big focus in cloud this year, but we still haven't achieved one of those early promises of cloud -- portability. Do we get closer to that in 2016?
Engates: Containers actually are the first time we have an opportunity to enable those customers to move workloads more easily. But the truth of the matter is once a workload is placed somewhere, they don't want to move it if they don't need to move it.
At the same time, they do end up working with multiple clouds. Their next initiative might be built by a third party with expertise on Azure, or it may sit on AWS. Another might be built by someone in-house on OpenStack, so you end up in a multicloud world just by the fact that multiple applications are springing up in different locations.
You either need people with experience on all those platforms, or building tools that can work across all three and help with the governance of all of those. People don't want to have lots of different platforms looking different, so they want to bring them under one architectural view. We have lots of tools that integrate with those capabilities and give customers a single view into a lot of that, and a lot of the burden falls on Rackspace to manage the day to day, so, ultimately, customers don't have to do as much to get the benefits and reap the reward of cloud.
07-01-2016, 10:15 #4
Rackspace closes down 7% following AWS price cut
- Rackspace reaches a 52-week low after Amazon announced price cuts for Amazon Web Services’ core EC2 cloud computing service.
- The 5% price cuts apply to servers based in the east, west of the US, as well as in Europe (Ireland, Frankfurt), Asia (Tokyo, Singapore), and Australia (Sydney)
- The discounts apply to C4, M4, and R3 server instances running Linux, and mark AWS’ 51st price reduction.
Rackspace traders not hip with AWS cost cuts?
By Lynn Brezosky on January 6, 2016 at 4:13 PM
Rackspace shares Wednesday fell 7.24 percent to 23.72, not too far removed from the San Antonio-based managed cloud provider’s 52-week low of $23.15.
Bloomberg reported the stock at 34 percent below its consensus one-year target price, and noted a negative 7 percent return for the first few weeks of 2016 and a loss of 50 percent over the past 52 weeks.
The dark day follows a “Happy New Year” price reduction from Amazon Web Services, which in October announced an agreement with Rackspace and its fanatical cloud support services.
Amazon on Tuesday reduced pricing by 5 percent for on-demand, reserved instances and dedicated host prices for C4, M4 and R3 instances running Linux in various regions in the United States, Europe, Asia Pacific and South America. AWS touted it as its 51st price reduction.
It seems to point to a cause-and-effect, and as Tim Beyers, who has covered the stock for The Motley Fool noted, AWS price cuts are going to get the attention of the Rackspace investor.
“It raises questions about just how important that relationship is going to be over time if Amazon just continues to cut prices,” he said.
While the stock’s nowhere near its 2013 high of nearly $80, it’s still not cheap, Beyers said, which is going to make traders more reticent.
Some may bail on the stock, while others may buy the company’s message that it’s in an investment and growth mode now. Clout-holder Goldman Sachs, which opened coverage with a “neutral” rating and $27 price target, said the company is “still in the midst of its pivot.”
Another factor to keep in mind? A downtrend in general. The Dow Jones industrial average ended down 252 points, making for the worst three-day stretch since 2008.
Última edição por 5ms; 07-01-2016 às 10:20.