The Troposphere

Mar 8 2011   9:11PM GMT

Poor man’s VCE? Rackspace Cloud Builders wants to sell you OpenStack

CarlBrooks Carl Brooks Profile: CarlBrooks

Has hosting and cloud leader Rackspace found a way into the private cloud fray?

A new service offering by Rackspace Cloud Builders will come to you, wherever you may be, and install a bunch of hardware and software that qualifies as cloud; a definite new twist from Rackspace’s usual hosting, co-lo and cloud sales model.

To boot, Rackspace will offer pre-certified arrangements of hardware to go with OpenStack, although it is shy about using that term. At Cloud Connect today, we are told, Dell, Opscode and Rackspace demonstrated ground-up cloud building, which presumably involves some rackable Dell gear and some bootable media.

I must admit to some curiosity: Did every demo start from scratch? Is it cheating if you don’t zero the drives for every “cloud build”? I’d be booting servers off images on my laptop, so presumably it’s only cheating if they changed the BIOS settings.

Rackspace’s new Cloud Builders division consists basically of Anso Labs, acquired last year by Rackspace specifically for its on-prem capabilities. Rackspace claims it can pick and choose from more than 50 companies in the OpenStack project with which to build a private cloud that will be “cost competitive with Amazon,” if customers will only let Rackspace build the a cloud environment.

First of all, that’s ridiculous. Nobody operating a private cloud can compete on cost with Amazon Web Services (AWS). At most, Rackspace might get operating costs down to the point where one could pitch an internal private cloud deployment vs. AWS when security, compliance and governance are taken into account. And companies are not even going to bother to try that until their current infrastructure is fully depreciated.

What this really is a way for everybody involved in OpenStack to put up a viable alternative to cloud-in-a-box offerings from premium IT vendors. It’s more a poor man’s VCE and it’s silly to pretend otherwise.

The writing’s on the wall for IT operations that are not moving off premise for new infrastructure deployments. It’s going to be dense, converged and virtualization-ready; IBM, HP, VCE and now maybe Oracle have a lock on that business. New buys for big hardware will skip right past “converged” for “cloud” since the functionally the same thing with a new set of management tools at the hardware level.

Those big IT vendors sell support, support, installation, and more support. And it’s not cheap — in fact, it’s downright larcenous. In some cases, an Oracle Exalogic with Sun tools, Linux and Oracle database will run $4 million, plus a support contract that might be 30% of your licensing fees (according to a floor rep last year). Plus, you can’t ever, ever switch after you buy. A fully loaded Vblock is plenty comfortable in that price scale, too.

I don’t know about you, but I can fill a rack or two with blades, storage and open source software for a bit less than that kind of cash. I’m betting Rackspace sees the same opportunity (they’re the commodity operations experts, after all).

So let’s not beat around the bush; the service announcement and hardware demos are really about taking a crack at staying alive in big enterprise IT shops, but that’s a harder sell than telling customers they might be able to do what AWS does if they just know the magic words.

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  • Garretsonr
    I agree with you that Rackspace may not be able to compete with AWS on cost, but I was surprised to see how well the stack up with Amazon on performance. According to the recent [A href=""]Top 15 performance rankings[/A] by, Rackspace snuggles right in between Amazon EC2 East -- just a a few nanoseconds slower in response time -- and EC2 West -- not quite a second faster. They seem to be the only non-Microsoft, non-Google, non-Amazon provider that holds its own with those big boys. --Rob [A href=""]About me [/A]
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