
Rackspace Unlikely to Withstand Amazon, Google Onslaught - larrys
http://blogs.barrons.com/techtraderdaily/2013/12/18/rackspace-ubs-starts-at-hold-unlikely-to-withstand-amazon-google-onslaught/
======
amadeuspzs
We use Rackspace, AWS, Pair networks and a local VPS provider.

Anecdotally, I would say Rackspace has the most intuitive interface and good
telephone support. They've just released new performance instances which are
cheaper than AWS: $0.08/hr for 2 vCPUs, 2GB RAM and plenty of SSD vs $0.12/hr
for AWS 2 vCPU m1.medium.

Our local VPS has fantastic customer service and we know each other by name.

Amazon has the real truly global infrastructure (Rackspace UK is a separate
entity to US, ASIA) and Route 53 Anycast is outstanding.

We'll be trialling out Google Compute Engine to see how it fares.

For now I see Amazon for global DNS infrastructure, but I can't see Rackspace
going anywhere.

Seems like Gartner have previous with Rackspace:
[http://www.theregister.co.uk/2013/11/20/gartner_openstack_cr...](http://www.theregister.co.uk/2013/11/20/gartner_openstack_criticism/)

Also interesting reading: [http://gigaom.com/2013/12/20/backbreaking-
openstack-migratio...](http://gigaom.com/2013/12/20/backbreaking-openstack-
migrations-hinder-enterprise-upgrades/)

------
adventured
While this may end up proving true, Rackspace has been counted out over and
over again during its long, successful history.

Previously it was claimed that ever cheaper dedicated servers would wipe out
their expensive offering. I think they're likely to retain a healthy business
in 'cloud' for the same reason a nearly infinite supply of cheap dedicated
server competitors didn't kill them previously - assuming they keep doing what
got them this far, namely managed offerings and customer service. That's a
value proposition Google, for one, will never even attempt to match.

~~~
rhizome
Granted my experience was 5 years ago, but aside from initial setup, I would
have no problem handing off daily sysadmin duties to them under a managed
offering. I even gave them runbooks back then, which they were great at
following in case of the often-out-of-control java app we had built for us. I
still had midnight calls from them, but their services eliminated a lot of
basics from my routine. Like you, I severely doubt Google and Amazon would
ever offer these features and will always live in the shared-hosting tier of
quality and performance for me.

~~~
larrys
"Like you, I severely doubt Google and Amazon would ever offer these features
and will always live in the shared-hosting tier of quality and performance for
me."

But just think what would happen if Google or Amazon decided to go customer
service friendly and charge for managing and hand holding. My feeling is that
they could turn on that spigot at any time if they wanted to.

~~~
InclinedPlane
Amazon, perhaps. But AWS is already crazy expensive, adding silver spoon
levels of managed hosting would price them right out of the market. The reason
Amazon is competitive is because they can offer a different product than other
folks. The value of that product comes from software development, not customer
service staff.

As for google, they couldn't interface with a real customer if their life
depended on it. And the idea that they could suddenly build out a massive
managed hosting service on a whim is not reflective of reality. Your claim is
basically saying that no company in the world has a competitive advantage
because anyone else could just start doing what that company is doing on a
moment's notice.

~~~
waps
That's something I don't really understand about all these offerings. They're
all crazily expensive. There's small differences, but not much. Rackspace is a
tiny bit cheaper, with significant disadvantages, google and aws are roughly
the same (I get the impression google is more expensive, but better for cpu
workloads).

Compare it to any "standard" vps offering and they're insanely expensive.
Compared to the vast majority of dedicated hosters they're insanely expensive.
Plus you're the only one on your cpu/memory/disk.

Anybody with a monthly AWS spend of $100 or more could have 2 dedicated
servers, one in .eu, one in the US, for 20-30% less dollars, 5-10x more cpu,
32 Gig of dedicated memory or more, 100x more bandwitdth (and no surprise
overuse charges, finding hosters that just "limit" you to 10 mbit is easy),
everything non-shared and good support. Hetzner ES40 is EUR 40/month, 32Gig
ram, 2Tb disk, unlimited bandwidth, similar offerings are available in the US
(e.g. www.ovh.com.ca ).

Total spend for effectively ~ m3.2xlarge instance, one in US, one in EU :
$120.

AWS spend for a comparable config : 1 month of m3.2xlarge : $650 5/10 Tb of
internet facing traffic: $600/$1200

I think this is being generous to AWS, because an m3/2xlarge does not match
the specifications of the dedicated server offerings.

Granted, these services are not as flexible as AWS. At the prices they offer
though, is there anyone who really argues AWS is better for anything but their
free tier ? As for the "extras" amazon offers : since they're all proprietary
businesses, every amazon extra you use (e.g. S3) is something you're betting
the business on.

And since none of the aws/google/... offerings are anywhere near what I want
(just set this .jar in my homedirectory live, ditto for go binaries, or move-
tag-and-push git publishing), I have to script stuff to make that happen
anyway (I love docker).

Why does AWS have customers at all ?

~~~
j-kidd
Outside of US and EU, it is quite difficult to find a reputable _and_
affordable dedicated hosting provider. We use AWS extensively in ap-
southeast-1, and their new C3 Compute Optimized instances are actually very
competitive in price-performance ratio. Previously, we mostly used C1
instances, which were just okay. I never like the M1 / M3 instances.

Besides, in this region with messy peering agreement, AWS network also has the
lowest ping time and the fewest hops.

~~~
waps
So inside of EU/US you do use dedicated server providers ?

AWS is effectively (almost) a transit-only network. That has pros and cons. On
the plus side, it should have decent connectivity anywhere. On the minus side,
if (almost) any link at all on a network is congested, that will almost
certainly congest AWS traffic too. They're relatively unlikely to have long-
running issues. Also : they're REALLY expensive.

------
tyrelb
As a Rackspace customer, I can confidently say that you feel like a customer
at Rackspace (vs. being the product at Google).

~~~
us0r
Google never has and probably never will do support right.

~~~
aroman
_> Google never has and probably never will do support._

FTFY

------
tn13
We should stop taking such predictions seriously because it is more focused on
investors rather than the company's actually ability to create value.

I have worked with Rackspace since the dot com boom, they were one of the rare
companies which actually grew when the bubble burst [citation needed]. It is
unlikely that Rackspace will beat AWS or Google in short term but I dont think
it is a dooms day either. Any large company will not make the mistake of
relying on just one cloud service provider such as AWS (and I dont see why
anyone would chose Google for a serious business). I have used rackspace for
many reasons and spending around 20% of my infra cost on Rackspace (20%
softlayer 40% Aws 20% Mixpanel).

~~~
Kroem3r
Here's a reason to take the prediction / analysis seriously: The analyst makes
these statements, the market joins in, and then management begins to follow
along. Not a happy model, nor one that is always followed, but certainly a
component of publicly traded companies.

It would be fun to have an review of how insightful a given analyst has been.
It would also be good to have a proper 'full disclosure' policy.

------
kordless
From the quarterly report in September, public cloud revenue is up $29M a
quarter from last year to $108M for Q3/2013\. Dedicated hosting income is up
$24M a quarter from last year to $280M for Q3/2013\. I hardly see how doing a
competitive doom and gloom comparison on what is essentially 27% of a
company's revenue is useful.

Making a point that AWS owns 80% of the IaaS market has little to do with
existing dedicated hosting provider's revenue!

------
smtddr
The fact that this article is even choosing to focus on Rackspace as opposed
to say linode, asmallorange, prgmr.com, etc. is already a sign that Rackspace
has become big enough to be worth talking about. At least so far, apparently
they're on the right track. I think they'll be around for a pretty long time
even if they never completely crush the other cloud giants.

~~~
mabhatter
the problem now is that "merely profitable" companies need to be viciously
attacked by companies like Google and Amazon that have flying STOCKS but post
no PROFITS. Just "doing their job" and having happy customers isn't good
enough if a Wall Street giant needs your business added to it's marketshare so
they can avoid some taxes next year.

~~~
waps
Ok, true, Amazon has no profits. But Google does. Quite a lot even.

------
aaronbrethorst
Ten bucks says this is how Oracle gets their foot in the door of the cloud
space...by buying Rackspace.

~~~
nighthawk24
^ this, is very likely to happen

------
billwilliams
A comparison that this article makes 'Ah yes Amazon has the best most
excellent Virtual machines but Rackspace has the best most excellent public
cloud'. I make the best tomato sauce, but my competing friend makes the best
tomato sauce.

------
727374
I disagree because Rackspace is the most logical disaster recovery (DR)
solution for companies that primarily use AWS. Even if you have DR backups in
other AWS data centers, you're not protected from bugs that could affect all
data centers. I've seen this happen with Windows Azure, and it could happen to
any cloud provider. Therefor, very conservative enterprises will want a second
cloud provider and Rackspace complements AWS nicely. Considering that the most
conservative firms are the last to adopt the cloud, I think this kind of
consideration will gain traction and drive business to Rackspace.

------
eslaught
> Rackspace has nine data centers on four continents and more than 100,000
> servers. For comparison, AWS also has nine data centers but on five
> continents and virtual machines in the millions. We believe AWS has more
> than 5x the IaaS capacity of the next 14 vendors combined.

"Servers" and "virtual machines" are two different things. You could easily
run 10 VMs on a single server at the lower end of the VM price range. So
without more precise measurements, these numbers mean nothing.

(What they say may still be true; you just can't tell from the numbers we're
given here.)

------
InclinedPlane
Traditional economies of scale don't carry over very easily to the digital
age.

Google being a perfect example. They leverage many economies of scale, but
they do so through efficiencies that are non-trivial to implement. The
datacenter model that google pioneered more than a decade ago is only now
seeing penetration in the industry as a whole, and nobody can approach
google's capabilities on the same score yet.

But while that helps google's search app it doesn't necessarily give them an
edge when it comes to hosting. There are so many other factors such as
customer engagement which are important in the hosting business. Amazon gets
this right but google is the poster child for aspergers on a corporate scale.
There's little reason to imagine that rackspace will be incapable of keeping
up as technology advances. There's little reason to imagine that even
digitalocean won't be able to keep up either.

Personally I wouldn't think it a forgone conclusion that google's hosting (app
engine and what-have-you) will ever mature into an industry leading product.
The problem with google is that everything that isn't search or backbone ISP
is a side show in terms of revenue, so there is an absence of a culture
capable of developing, delivering, marketing, maturing, and monetizing
products at google. And definitely an absence of a culture capable of
acquiring and dealing with customers.

~~~
larrys
"so there is an absence of a culture capable of developing, delivering,
marketing, maturing, and monetizing products at google. And definitely an
absence of a culture capable of acquiring and dealing with customers."

This really is the core of it. I'm remembering how long it took AT&T after
divestiture (mid 80's) to turn into a company that instead of a monopoly and
technology had to actually do marketing. The upper ranks of the company down
to the guys on the street never had to do that. It took a long long time.

~~~
InclinedPlane
We're in a really weird state with technology right now and a lot of it has to
do with the comparatively undeveloped level of models and terminology we have
available.

Let me use an analogy. There are lots of different people who work in a
"shop", but they use different tools and work on different things. There are
wood workers who do carpentry, there are metal workers who work with metal,
and so on. Even wood work can range from fine carpentry making use of a lathe
to general contracting and building simple structures by nailing together pre-
made pieces of lumber. While metal work can run the gamut from machining to
iron mongery and forging to soldering and brazing and can include everything
from a plumber on the one hand to someone who designs internal combustion
engines on the other.

Fortunately we have the terminology to describe these different jobs
reasonably well. It's not easy to confuse a plumber with a machinist. But
that's not true when it comes to tech. We have very little terminology in that
realm. It's non-trivial to explain the difference between a systems
programmer, a DevOps automation guru, a mobile app dev, a web dev, etc. A lot
of these jobs end up falling under the standard "software developer" heading.
Even though that's about as silly as calling taxi drivers and truck drivers
"automobile operators".

This problem of terminology extends into the tech industry as well. We have
sufficiently developed mental models of things like restaurants to be able to
understand the differences, and difficulties of changing, between sit-down,
take out, delivery, and catering focused establishments. Yet when it comes to
tech our brains go on vacation and suddenly the equivalent of a high-class
sit-down restaurant switching to making pre-made meals to be sold in grocery
stores seems trivial when it is anything but.

You get the same effect when people ruminate on how Apple should spend its
huge cash reserves. With people throwing out crazy ideas of how Apple should
buy into some completely different industry that would totally change the
nature of the company, which is just as ridiculous as the idea they should
switch to building rocket ships or submarines.

~~~
larrys
What's interesting is that tech is very precise and yet plumbing is not (it's
analog with some margin for error just like cooking as another example).

But both of those things have been around for much longer than tech so perhaps
the roles are clearly defined for that reason. (You probably could find
counter examples of course.)

Maybe this stems from the fact that the general public doesn't typically deal
with "computer guys" [1] so they have no need to differentiate them. But they
do need plumbers, carpenters and electricians and they know what they are. [2]
(And those are also union jobs so that probably also makes titles necessary).

[1] How many times have you heard "he does something with computers?".

[2] Maybe this all stems from the fact that there was no central defining
authority at any point that made any statement as to what the titles meant.
Even in religion there are clearly defined titles, right? In tech (on the net
at least) what do we have? RFC's a nice way of asking opinions.

------
patrickg_zill
Which of the 3 allow you to reach an actual human, quickly, on the weekends,
even if you are spending less than $5K per month?

Asking for real, my guess is RS does, but I don't know about the other 2.

~~~
dhawalhs
Rackspace has a live chat which is 24/7 with knowledgeable support techs.
Bugged them twice yesterday and they responded very quickly. My last rackspace
bill was 60$.

------
ezequiel-garzon
It seems to me that, in spite of the advent of "cloud-based" hosting providers
such as AWS and GAE, the demand for more traditional hosting, ranging from
RamNode to DigitalOcean to Hetzner, is not waning at all, though this is just
a personal perception.

On the other hand, it baffles me that providers such as Hetzner have not had a
greater impact on the price charged by Rackspace and others. It's also
surprising to see most of the best prices for dedicated servers coming from
Europe and not the US.

------
juddlyon
Excellent service doesn't go out of style.

------
midas007
I've used Pair, Linode, AWS, Rackspace and Bytemark.

Pair, Bytemark and Rackspace pick up the phone. Bytemark has the most chops by
far, and is flexible to support custom stuff. If you just love *BSD, Pair of
course.

------
larrys
Separately I'm wondering if "jnoller" is still working at Rackspace. Noting
that there was a flurry of activity on HN from his comments that appeared to
have stopped about a month ago.

~~~
jroll
He is; he's part of the Developer Relations Group. I know he's been on
vacation recently, that's probably part of the reason he hasn't posted as
often.

------
Aloha
Someone will still need to offer putting physical servers in a data center.
Not all workloads are well served by cloud/VPS offerings.

~~~
wmf
But you've offered no particular evidence why that someone will be Rackspace.

~~~
sundaeofshock
Racksapce has offered this service since the late 90s.

------
brianbarker
But without Rackspace, where will Scoble work?

