News of Rackspace leaving the Infrastructure as a Service arena may seem at odds with the company's core strengths as a premier data center and service provider. However, after thinking about this decision and why they made it, it seems to me that Rackspace may actually have a good understanding of who they are and what they want to be as a service provider.
Rackspace Won't Follow Amazon
First, the good news is a company like Rackspace has decided not to take the road more frequently traveled. In this case, following Amazon down the path of lower cost infrastructure ended up not being a strategy Rackspace wanted to pursue. This is good for a number of reasons.
Amazon is a great company and provides a very good solution at competitive prices. In fact, their prices have been dropping for quite some time now. But, solutions like AWS are not for everyone, and some companies need more transparency into their cloud and infrastructure networks. This is apparently where Rackspace wants to play. This is good news because it demonstrates that a service provider company (which Rackspace most definitely is) can compete on value and quality and not on price.
Managed Cloud
Rackspace is taking the opposite approach from Amazon by including managed services on top of its IaaS platform. This way, customers can get a managed cloud environment in addition to just the IaaS. This move is important because it demonstrates a move up the value chain rather than a move towards price reduction and commoditization. This approach is a model many other MSPs should take note of and follow. Adding value, not cutting price, is a valid market trend for MSPs.
Message to MSPs and Vendors
The broader lesson here is both to MSPs and how they should be positioning themselves in a cloud world. But, there is a clear message to the vendors as well. Companies like Cisco, IBM, HP, and Dell, all play in the managed services and cloud computing arena. More specifically, these companies are right now trying to figure out a role they can play in this new channel. Taking a page from Rackspace could help these vendors create products and channel programs designed not to emulate commodity driven cloud infrastructure, but rather create flexible and responsive cloud computing environments which are truly in demand by customers.
