Rackspace partners with Pivotal to launch managed services for Cloud Foundry

“Managed Pivotal Cloud Foundry is Rackspace’s first step into the managed platform space, as we move up the stack to solutions that customers want our help with,” wrote Brannon Lacey, vice president of applications and platforms at Rackspace, in today’s announcement. “It is a solution that helps customers get up and running on Pivotal Cloud Foundry quickly and stay up and running, with operational support and proactive monitoring. This way, in-house teams can focus on innovation and getting out to market quickly while Rackspace handles the backend.”

Source: Rackspace partners with Pivotal to launch managed services for Cloud Foundry, Frederic Lardinois, TechCrunch

Rackspace positioning around cloud and OpenStack, from the CEO

Now that they don’t have to compete with AWS, they have an extra $300m floating around in the spreadsheets:

“Ultimately now it’s about how are we going to build a stronger company. If we don’t have to go spend $300 million a year in capital competing against Amazon, building computing storage and networking, where should we go put that? In things like managed cybersecurity and professional services,” said Rhodes.

On OpenStack, finding the product/market for for private cloud:

And what about OpenStack, the open-source cloud computing platform that Rackspace created with NASA?

“We thought the world wanted another alternative to public cloud,” said Rhodes. “What we are learning is the world doesn’t need another public cloud, so OpenStack is shifting form and going private cloud.”

Also, cameo from my former 451 colleague Carl Brooks.


Rackspace goes private for $4.3bn

  • Apollo Global Management paying $4.3bn to acquire Rackspace, $32 a share in cash, a 38 percent premium (Bloomberg)
  • Competing against AWS is hard, plus the other mega public cloud plays: “Google’s parent, Alphabet Inc., Amazon and Microsoft have combined cash holdings of more than $200 billion compared to Rackspace’s less than $1 billion.”
  • Brenon at 451 points out that Rackspace throws off a good amount of cash, “$674m of EBITDA over the past year,” and concludes:
  • More from Brenon: “While we could imagine that focus on customer service as competitive differentiator might set up some tension under PE ownership (people are expensive and tend not to scale very well), Rackspace has the advantage of having built that into a profitable business. In short, Rackspace is just the sort of business that should fit comfortably in a PE portfolio.”
  • Meanwhile, as we discuss on Software Defined Talk (#70, “No one wants to eat a finger-pie”), AWS is at a run-rate of ~$10-11bn and growing.
  • In the recent Gartner IaaS Magic Quadrant, Racksapce is in the dread lower left hand corner. To be fair, a whole other MQ, “Cloud Enabled Managed Hosting,” which maps closer to what Rackspace says is their core strategy in cloud, has Rackspace leading. But, back to that “normal IaaS” MQ:
  • The MQ says “Rackspace has successfully pivoted from its ‘Open Cloud Company,’ OpenStack-oriented strategy, and returned to its roots as “a company of experts emphasizing its managed service expertise and superior support experience.”
  • Also: “Rackspace will continue to divert investment from its Public Cloud to other areas of its business, rather than try to compete directly for self-managed public cloud IaaS against market-leading providers that can rapidly deliver innovative capabilities at very low cost, or against established IT vendors that have much greater resources and global sales reach.”
  • See also Rachel’s analysis over at RedMonk.


Finally, check out a tad of commentary on the deal in #32 of Pivotal Conversations.

Coté Memo #039: research agenda crafting, what Docker will spend $40m on, RAX no longer for sale


Hello again, welcome to #039. Today we have 46 subscribers, so we’re +1. Dandy! I’d love to hear what you like, dislike, your feedback, etc.: memo@cote.io. (If you’re reading this on the web, you should subscribe to get the daily email.)

See past newsletters in the archives, and, as always, see things as they come at Cote.io and @cote.



Tech & Work World

Quick Hits

This [cash injection] puts us in a great position to invest aggressively in the future of distributed applications. We’ll be able to significantly expand and build the Docker platform and our ecosystem of developers, contributors, and partners, while developing a broader set of solutions for enterprise users.

Look for significant advances in orchestration, clustering, scheduling, storage, and networking. You’ll also see continued advances in the overall Docker platform–both Docker Hub and Docker Engine.

And a fun diagram:

The Docker roadmap

What cloud vendor d'ya like?

Research Agenda Decisions

I have three options (OK, four) of what I should focus on in my analyst work in front of me and I’d be curious to hear your input:

  1. DevOps – we’ve done plenty of coverage here and there, but if you recall back in #028, we could do with a more rigorous and deep research agenda here.
  2. Software Development – when I was hired, this was an area that needed filling and I certainly would like to. As with DevOps, all of us fill it in well but we might could do with more focus on it.
  3. Plain of systems management, virtualization, etc. – while folks on my team cover APM, cloud platforms, and other areas, we don’t have a dedicated focus (again, with that rigor and depth I outlined for DevOps).
  4. Continue to be a be broad and cover all of the above, but with the more shallow depth that comes from broad coverage.

As I mentioned, at the team level we cover all the three items above. The question is what I should spend “all of my time doing.” In each of the three real options above, I could easily talk with only companies and end-users in those areas, spend “all my time” focused on researching and writing just one of them. My question to you, dear readers, is what you would (a.) find most valuable, and, (b.) what you think would be the best (criteria: commercially valuable, interesting, fun people to talk with, etc.) area for me to focus on (separate from of your needs).

I’ve equivocated many times solid answers for all four of the above, so outside feedback would be helpful.


Travel is starting up again, oh boy. I’m off to Boston later this week, Chicago next week, then HCTS (you can still get $200 off, see above!) in Las Vegas, BMC’s conference in Orlando, Paris for the OpenStack Summit, CA World in Las Vegas, and Toronto for a TechTarget speaking engagement. So far, beyond that, things look clear.

Fun & IRL

No fun today, just work.