Rackspace pushes bare-metal cloud amid shaky future

Rackspace is pushing bare-metal IaaS and containerization as it faces an uncertain future.

With its future up in the air, Rackspace has reworked its existing OpenStack infrastructure in an effort to jump-start sales.

San Antonio-based Rackspace Hosting Inc. next month will begin regional availability of OnMetal Cloud Servers, a single-tenant, bare-metal infrastructure as a service (IaaS) with an application programming interface (API) that offers a simple and cheap way to scale, while avoiding complications that can arise from sharing host networks, the company said.

Rackspace placed its bets on the potential for bare-metal cloud and containerization as a means to isolate applications and remove the need for virtualization for large-scale users. Google built its products through containerization, and along with other Internet giants, relies on its own data centers and colocation facilities to operate, according to Rackspace. Rackspace said OnMetal will allow customers to do what the big guys do.

Would you purchase a new Rackspace product given the uncertainty of the company's future?

James Staten,
analyst, Forrester Research

Zack Rosen, CEO of Pantheon, said OnMetal is the product he wanted Rackspace to build. The San Francisco-based software as a service hosting company manages 250,000 websites, and the traditional infrastructure model would have required an equal number of virtual machines, Rosen said.

"That would be crazy," Rosen said. "We couldn't afford to do it."

Pantheon, an early adopter of OnMetal, is able to put one platform on metal, based on containers. The service allows the company to do six updates a day and find orders of magnitude in efficiency and scale, Rosen said.

Aaron Rankin, co-founder and CTO of Chicago-based social media management startup Sprout Social, a Rackspace customer, doesn't use OnMetal, but is interested in the concept.

"It's not ground-breaking, but it is unique and interesting among the big cloud vendors," Rankin said.

The not-so-novel bare-metal cloud

Mirantis Inc. beat Rackspace to the punch a week earlier with an OpenStack offering that is on-demand and billed by the hour -- and it's not alone. Companies such as LiquidWeb Inc., IBM SoftLayer, Codero Hosting, Internap Network Services Corp. and others already offer bare-metal IaaS.

"Rackspace's new offering is nifty, and they're talking up the speed to provision because that is definitely a differentiator with SoftLayer's bare-metal service, but it's not a giant killer," said Carl Brooks, an analyst with Boston-based 451 Research.

There may be some truth to Rackspace's scalability claims, but it's not clear how much that will matter, according to James Staten, an analyst with Cambridge, Massachusetts-based Forrester Research Inc.

"This is catch-up for Rackspace," Staten said.

Many of the bare-metal "cloud" offerings -- even Rackspace's existing products -- aren't legitimate clouds because they aren't provisioned through an API and can take hours or days to scale, Rackspace said. Even with SoftLayer -- the other big-name vendor beating the bare-metal drum -- it can take over an hour to process a request.

OnMetal is a repackaging of Rackspace's OpenStack business of hosted private clouds into an easier consumption model, Brooks said. The company also offers a free OpenStack distribution on its site, but Rackspace hopes customers will go the paid route because it's easier to turn on.

Though Rackspace touts OnMetal for its pay-by-the minute utility type billing, the company declined to provide pricing. It will be available in its northern Virginia region in July before expanding nationwide based on demand, the company said.

Rackspace's future remains uncertain

This service comes as speculation runs wild about Rackspace's future. A Security and Exchange Commission (SEC) filing by the company in May revealed Rackspace has been approached by multiple parties interested in a partnership or acquisition. Morgan Stanley has been hired to evaluate the proposals and other options.

The company has not put itself on the market, but it has a responsibility to shareholders to respond to outside interests, said Ev Kontsevoy, director of products at Rackspace.

Regardless of the outcome, Kontsevoy said it won't impact the customer base or the managed services Rackspace provides.

"We are not changing our roadmap," Kontsevoy said. "The documents we filed, they are not impacting our business in any way."

The SEC filing won't change the company's roadmap because it's primarily done to send the right signals to potential investors, but it could worry customers, Brooks said. If Rackspace is acquired it could follow the pattern of similar buyouts, including SoftLayer, which was given two years of independent operation after IBM acquired it.

"The usual pattern has been to leave the infrastructure provider alone to run their business as much as possible and very, very slowly and carefully integrate the top brand, precisely to minimize customer jitters and to avoid jamming up a perfectly good operation," Brooks said.

Trevor Jones is the news writer for SearchCloudComputing. You can reach him at tjones@techtarget.com.

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