Rackspace Looks To The Telcos In Global Expansion Of Its OpenStack Cloud

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Rackspace is banking on service providers such as telcos for its global expansion, leveraging OpenStack to build out cloud infrastructures that partners will then charge customers for cloud offerings.

Rackspace will provide an end-to-end program that will include the hardware and the OpenStack cloud operating system software for the build out. The company will provide continuous automated testing and delivery of updates from the Rackspace engineering teams. Rackspace will also manage infrastructure operations such as patching, tuning and monitoring.

Rackspace CTO John Engates said in an email interview that if a large telco or service provider wants to become a public cloud provider, they have lots of options for the parts, but none of the sum:

Until now, there has been no way for them to get all the pieces they need. They could go to a hardware company who will pull a tractor trailer full of hardware up to the loading dock, call a software company to buy licenses, an integrator to come put it all together, some business consultants to help figure out the go to market pieces, and maybe two years later get to market with something that they hope works. Then they have to figure out how to operate it long term, and build the engineering teams to continuously innovate the platform. What makes this different is that we’re giving them everything.

The expansion in many respects is a blueprint for what could be an antidote to Amazon Web Service (AWS) considerable growth. Rackspace goal is to form a partner network that could act as one federated cloud that allows for the build out across multiple regions with OpenStack as the common operating system.

“We want to spread as fast as possible,” said Scott Sanchez, director of strategy for Rackspace Open Cloud (OpenStack) at Rackspace Hosting in a phone interview last week. “This gets us into markets that are underserved.”

In contrast, AWS has built out its own proprietary data centers around the world, treating them as one giant, programmable system. The contrasts show how AWS pushes a direct strategy while Rackpace is planning to go direct and work with service providers as channels to reach the end market.

Marten Mickos is CEO at Eucalyptus Systems. His company competes with Rackspace and companies, such as VMware. His comments, also in an email interview, reflect a market still forming.

It’s a difficult choice for customers. VMware is a great vendor, but they are expensive and they have not produced a great cloud product. OpenStack sounds very cool, but there are many cooks in the kitchen, and not all of those cooks are known for innovation. CloudStack has impressive deployments, but they are trying to fight OpenStack, and additionally they are bound by Citrix’s corporate strategy. Eucalyptus has an great strategy and a brilliant product (if I may say so myself), but customers need to come to terms with the power of the AWS API abstractions.

Forrester Analyst Lauren Nelson said in a recent interview that the great majority of customers are still working through their options.

“It will be another five to 10 years before this plays out,” she said.