Once upon a time, Rackspace was the leader in hosting and manage services. In 2013, they earned $1.53B in revenue, up from $1.3B in 2012, and $1B in 2011. Regardless of their revenue growth, Rackspace stock sank almost 50% in the last 6 months. Rackspace is in the same boat as Brightcove and Limelight Networks. Life is very hard in that boat, and it’s not getting any better. How is life for Rackspace going to improve with Google, Microsoft and Amazon in the picture? It’s likely to get worse before it gets better. However, there is light at the end of the tunnel.
Does Rackspace Compete with Google, Amazon and Microsoft)
Rackspace believes it doesn’t compete with Google, Microsoft and Amazon (Big Three). However, there is a different way to look at it. For every Fortune 1000, and large enterprise that spends a dollar on the Big Three, that’s a dollar Rackspace has missed out on. If Rackspace wants to become a leader in this sector again, the first order of change is mindset and attitude. Rackspace competes with every hosting, cloud compute, cloud storage and data center company in its ecosystem. The way it works in the CDN industry, if I’m fastly, I compete with all CDNs in my ecosystem, period. Every dollar that goes to Akamai, Limelight or Highwinds, is a dollar that’s not going into my coffers to pay the bills. Rackspace, here’s a little secret, you’re in the infrastructure business, CDN and Video are an infrastructure business, that’s how you beat the Google, Amazon and Microsoft. Continued in the next post