Rackspace Goes All In on Managed Cloud Market Segment

Rackspace Goes All In on Managed Cloud Market Segment 
SAN ANTONIO, TX  -- (Marketwired) -- 07/15/14 --   

--  New Enhanced Service Levels for Public Cloud Customers
--  Transparent Pricing Model
--  Rackspace Cloud Monitoring is Now Free for All Customers
--  New developer+â„¢ Program as an On-Ramp to Managed Cloud

Rackspace (NYSE: RAX), the managed cloud company, today announced a
new strategy to deliver public cloud services to the market based on
its core strength in exceptional customer service, known as Fanatical
Support®. The company's managed cloud strategy focuses on businesses
and developers looking for a strong partner to help design, manage
and scale their cloud operations.  
The company enhanced its managed cloud service levels and launched a
more transparent service-based pricing model that represents a clear
view of infrastructure pricing and emphasizes the value of Rackpace's
cloud management expertise. In addition, Rackspace announced
developer+, a new program for developers that offers essential
services needed to build scalable applications. The program enables
developers to easily sample Rackspace managed cloud services and
Fanatical Support. 
"The cloud market is evolving. More customers are looking for a
trusted partner with specialized expertise to help manage their
cloud. Rackspace is ideally positioned to lead this managed cloud
segment of the market," said Graham Weston, Rackspace co-founder and
CEO. "Our new service levels will help businesses tap the power of
the cloud without the pain of recruiting experts in dozens of complex
technologies. We are the partner that will be with them every step of
the way to help make their cloud strategy successful." 
New Enhanced Managed Service Levels 
Both service levels -- Managed Infrastructure and Managed Operations
-- feature more services and expertise at lower total cost than
companies would spend managing cloud operations on their own.
Highlights include: 
Managed Infrastructure - This service level offers a package of
benefits for customers that far exceed equivalent services from any
other cloud provider. Customers will receive renowned Fanatical
Support, which features architecture advisors, security guidance,
code development assist, launch assistance, and 24x7 access to cloud
Managed Operations - This service level provides customers with
Fanatical Support and all the services included at the Managed
Infrastructure level, plus additional proactive features such as a
dedicated account manager, 24x7 availability monitoring and response,
and management of common operating systems and application stacks.
Rackspace offers two approaches to deliver its Managed Operations
service level to customers. In one approach, Rackspace logs into the
customer's servers to manage and, when necessary, help fix them. The
other approach leverages Rackspace DevOps Automation Service, which
manages a customer's infrastructure as code, to help it achieve
faster deployments and streamlined operations.  
In addition, monitoring and enabling customers to have real-time
visibility into their infrastructure is an essential part of the
Rackspace Managed Cloud strategy. Customers on both managed cloud
service levels will now receive Rackspace Cloud Monitoring at no
charge. For Managed Operations customers, cloud engineers will also
watch the customer's monitors and respond 24x7 to alerts. 
Rackspace's enhanced service levels also provide additional value and
offer a service level agreement that is not available with other
providers. Customers on the Managed Operations service level will see
SLA credits doubled, up to 100 percent of their fees for the affected
components for that month's billing period.  
In addition, Rackspace is highlighting the value it provides over
unmanaged cloud providers by offering cloud deployment planning and
the availability of proactive assistance included in all of its
service levels. Managed Operations customers with planned high
traffic events will be able to work with Rackspace to help design
their managed cloud infrastructure to cope with the expected levels
of traffic. In addition, Managed Operations customers will have
access to a new SLA for these events. Now in limited availability,
the SLA provides a 10x accelerated credit during these planned events
for up to 200 percent of the customer's fees for the affected
components during that month's billing period, subject to certain
"Rackspace is a huge part of our application development," said
Guillaume Aubuchon, CTO at DigitalFilm Tree, which provides pre- and
post-production services to the movie industry. "It's crucial that we
have instant access to someone who knows both Rackspace's
infrastructure and our application to help guide and support us as we
scale up or build out new features. The value of Rackspace Managed
Cloud goes well beyond that. Without Rackspace, we would spend more
than $100,000 per year on an in-house engineer to keep our Critique
servers running 24x7. Rackspace lets us focus on work that will grow
our application and make our business more efficient and profitable." 
New Transparent Public Cloud Pricing Model 
Rackspace's new pricing model applies to all new public cloud
customers, and is optional for existing ones. It features more
transparency by highlighting the price of cloud infrastructure as
distinct from service and support. This model allows customers to
more accurately compare the true cost of cloud infrastructure from
provider to provider. For instance, Rackspace's Performance Cloud
Servers start at 3.2¢ per hour for 1GB server. These include RAID 10
SSD, redundant components, and ECC RAM all running in highly reliable
Rackspace data centers. It also delivers more clarity around all the
services that Rackspace provides -- services that customers of
unmanaged cloud providers have to obtain on their own by hiring
Managed Infrastructure service level offers an hourly service level
rate of $0.005/GB RAM, with a $50 per month minimum, plus standard
infrastructure rates. 
Managed Operations service level offers an hourly service level rate
of $0.02/GB RAM, with a $500 per month minimum, plus standard
infrastructure rates. 
With this pricing model, customers will be able to see their
infrastructure pricing in comparison to the market.  
Rackspace also will continue to provide volume pricing discounts, so
as a customer grows, the price of additional servers declines. These
discounts are automatically applied. As a customer grows, its unit
cost will decrease. Volume discounts range from 4 percent to 24
percent and will start at compute usage rates of $5,000 a month.  
"Competition in the public cloud market has accelerated in the past
year; however, Rackspace's managed cloud approach provides an
opportunity for significant differentiation from the rest of the
pack," said Melanie Posey, research vice president at IDC.
"Rackspace's new managed cloud strategy featuring enhanced SLAs and
its long track record in delivering superior support will create
sustainable competitive advantage in an increasingly crowded market." 
developer+ Program 
Rackspace's new developer+ program provides an infrastructure credit
for a package of cloud services for a limited time. It is designed
for developers who want to stay fast and lean and focus their
engineering talent on building their app, rather than swelling their
payroll with engineers who manage IT operations that don't
differentiate their business. This program paves the way for
customers to grow with Rackspace, and to understand and adopt its
hybrid and specialized services. This program empowers developers not
only to experience Rackspace's offerings, but to also build and scale
out cloud applications leveraging the full Rackspace cloud portfolio,
including the recently announced OnMetalâ„¢ product. 
For customers participating in the developer+ program, Rackspace will
provide an Infrastructure credit, which can cover a Performance Cloud
Server, a Cloud Load Balancer, Cloud Monitoring, Cloud Networks,
Cloud Backups, Cloud Files, Cloud DNS and built-in Email as a Service
via Mailgun, for example. In addition, developer+ customers will be
able to consume all other Rackspace cloud services in any region at
the adjusted infrastructure prices without the bundled service level
Developers will have access to public forums, IRC support, online
documentation, direct access to Rackspace developers, alongside a
fully redesigned developer portal. Developers are eligible to
participate in this program for up to 12 months before transitioning
to either the Managed Infrastructure or Managed Operations service
levels. The developer+ program will be available to customers in late
For additional information on Rackspace's managed cloud strategy and
new offerings, please read the blog by Rackspace President, Taylor
About Rackspace
Rackspace (NYSE: RAX) is the #1 managed cloud company. Its technical
expertise and Fanatical Support® allow companies to tap the power of
the cloud without the pain of hiring experts in dozens of complex
technologies. Rackspace is also the leader in hybrid cloud, giving
each customer the best fit for its unique needs -- whether on single-or multi-tenant servers, or a combination of those platforms.
Rackspace is the founder of OpenStack®, the open-source operating
system for the cloud. Based in San Antonio, Rackspace serves more
than 200,000 business customers from data centers on four continents.
It ranks #29 on Fortune's list of 100 Best Companies to Work For.
Forward Looking Statement
This press release contains forward-looking statements that involve
risks, uncertainties and assumptions. If such risks or uncertainties
materialize or such assumptions prove incorrect, the results of
Rackspace Hosting could differ materially from those expressed or
implied by such forward-looking statements and assumptions. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements, including any
statements concerning expected development, performance or market
acceptance associated with Rackspace Managed Cloud Services and
developer+ program; anticipated operational and financial benefits
from Rackspace Managed Cloud Services and developer+ program; any
statements concerning expected development, performance or
operational results related to any particular customer or customers
of our customers associated with our managed cloud solutions; any
statements of expectation or belief; and any statements of
assumptions underlying any of the foregoing. Risks, uncertainties and
assumptions include the possibility that expected benefits from
Rackspace Managed Cloud Services and the developer+ program may not
materialize because these services are not generally accepted in the
marketplace, which could occur due to certain factors including (i) a
failure to market the services cost effectively, differentiate the
services from competitive products or communicate differentiations
effectively, (ii) the reliability, quality or compatibility
associated with the services, (iii) changes in technology which
adversely affect the services' benefit, (iv) slowdowns in the general
economy or technology industry that impact consumer spending habits,
(v) internal strategy decisions that impact the services, (vi) issues
relating to the performance of a customer's configuration caused by
forces outside of the control of Rackspace; and (vi) other risks that
are described in Rackspace Hosting's Form 10-Q for the year ended
March 31, 2014, filed with the SEC on May 12, 2014. Except as
required by law, Rackspace Hosting assumes no obligation to update
these forward-looking statements publicly, or to update the reasons
actual results could differ materially from those anticipated in
these forward-looking statements, even if new information becomes
available in the future. 
Rackspace Media Contact:
Brandon Brunson
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