‘Real cloud’ is much more than cheap infrastructure, says Rackspace as cloud price war continues

Rackspace CTO warns cloud buyers of the dangers of buying cheap, raw infrastructure for their IT strategies as cloud price war intensifies

As Amazon, Google and Microsoft continue to slash cloud prices fiercely, managed cloud provider Rackspace is warning users of the dangers of buying cheap raw infrastructure for their cloud strategies.

A “real cloud” is much more than the infrastructure – it’s also the service, support and expertise that makes it all work, said Rackspace CTO John Engates.

Infrastructure is just one component of operating IT on the cloud, said Engates. Enterprises will also need specialists, such as systems administrators, database administrators, DevOps (development and operations) engineers, security engineers and application experts, who can build and run the cloud at scale. “That’s where the true cost of cloud comes in – and the true value,” he said on the Rackspace blog.

Engates said it could “cost you upwards of $500,000 a year to get the right people for the job – and that’s a conservative estimate”.

Two months ago, Amazon announced its 42nd price cut since 2008. It slashed the prices for Amazon EC2, Amazon S3, the Amazon Relational Database Service and Elastic MapReduce.

AWS’s price cuts came immediately after Google said it was cutting the cost of its cloud storage services by 68%. Google's new cloud storage services are available for as little as $0.026 per gigabyte. To keep up, Windows Azure general manager Steven Martin said Microsoft would match Amazon by cutting its compute prices by up to 35% and storage prices by up to 65%.

“We recognise that economics are a primary driver for some customers adopting cloud, and we stand by our commitment to match prices and be best-in-class on price performance,” Microsoft’s Martin said at the time.

But Rackspace's Engates warned that could success requires “much more than just renting access to cheap infrastructure”.

“The vendors leading the race to the bottom on the price of raw infrastructure would love you to believe that all cloud services are identical,” he said. “This is a dangerous and expensive way for developers and businesses to make critical cloud-buying decisions. Success with the cloud requires much more than just renting access to cheap infrastructure.

“Cloud infrastructure only works when it is delivered as a service.”

Rackspace’s comments come as the managed cloud provider posted modest net revenue growth of 3.2% for the first quarter of 2014. Rackspace's stock prices climbed as a result of its earnings, which exceeded analysts' expectations.

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