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Executive interview: Rackspace president Jeff Cotten reveals firm's big cloud bets for 2017

New Rackspace president Jeff Cotten reveals details of what the future holds for the managed cloud company now it's under new ownership

The success of Amazon Web Services (AWS) has prompted a number of high-profile IT suppliers to rethink their public cloud stance over the past few years, including Dell, HPE and Rackspace.

What makes Rackspace’s retreat from the market so interesting is the fact that, after ceding its share of the infrastructure-as-a-service (IaaS) market to AWS, the fastest-growing part of its business is now fuelled by the success of its one-time public cloud competitor.

Instead of going head-to-head with AWS, the company decided to effectively join forces with the firm in October 2015, with the rollout of its Fanatical Support for AWS managed cloud service.

The company has partnered with Microsoft to deliver similar services around its public cloud offering too, but – according to Rackspace’s own data – the AWS-flavoured version is the fastest-growing business in the firm’s history.

While the company’s decision to reposition itself as a partner to, rather than a competitor of, AWS and Microsoft seems to be paying off now, there has been very little detail shared of late about what else the company is planning to do to sustain its long-term growth.

One of the major reasons for this is the completion of the company’s purchase by private equity house Apollo Global Management in November 2016, which marks the end of Rackspace’s nine-year run as a publicly traded company.

The start of 2017 also brought news about a senior management reshuffle at Rackspace, heralded in part by the retirement of its president of global sales and marketing, Alex Pinchev.

This process has also seen the company’s president and CEO, Taylor Rhodes, hand over the presidential portion of his responsibilities to the former head of Rackspace’s Fantatical Support for AWS, Jeff Cotten.

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With the Apollo deal now done and dusted, and the firm’s new senior management setup in place, Computer Weekly caught up with Cotten to get the lowdown on his new role at the company and what the future holds for the newly private Rackspace.

To kick things off, Cotten talks us through how the division of labour will be split between him and Rhodes, and why the decision was taken to siphon of some of his responsibilities was taken in the first place.

According to Cotten, the change in management strategy is part of a wider push by the company to simplify its operations and service portfolio to make it easier for customers to consume its services and understand who does what at the firm.

“This is not a situation where Apollo is coming, bringing in their own leadership team in to drive radical change into Rackspace,” he says.

“Its sees the opportunity that exists here and ultimately is investing to help us execute on some things that we need to do differently but also on our growth aspirations.”

Perhaps unsurprisingly, these include capitalising on the company’s existing managed cloud success, but also “reinvigorating” the firm’s private cloud proposition. The former will fall under Cotten’s purview, while the latter will be Rhodes’s remit.

While the public vs private cloud debate continues to rage in enterprise IT departments, Cotten says the company is committed to helping enterprises choose the best environment for their mission-critical workloads.

“We believe there is still huge opportunity in the market for customers looking to come out of the corporate datacentres, because not all workloads are a fit for the public cloud,” says Cotten.

“Many of our customers are telling us they don’t want to move everything into the public cloud, but we need to evolve that offering to meet the needs of those customers.”

This is because Rackspace’s private cloud proposition has traditionally focussed on meeting the needs of mid-market customers rather than large enterprises.

Making in-roads into the enterprise

And that is not the only way the company is attempting to court the enterprise, as Rhodes will also be tasked with overseeing the firm’s Top 100 Accounts strategy.

“We need to be able to serve customers that want to consume multiple platforms and multiple services from Rackspace, and we will do that via our Top 100 Accounts model,” says Cotten.

The Top 100 Accounts will be made up of big customers, keen to make full use of the full gamut of Rackspace’s managed cloud services, and it will be Rhodes’s job to ensure they are delivered to them in a consistent and seamless manner.

“That includes Rackspace services on top of AWS, on top of Microsoft Azure, and on top of our own datacentres and what we provide there,” he says.

Cotten is something of a Rackspace veteran, having joined the firm – after being hired by Rhodes – eight years ago. In that time, he’s worked as a frontline support team leader, overseen the running of its AWS-managed cloud business and managed the firm’s international expansion plans.

“That experience has served me well with our customers to articulate how we provide value and what that ultimately means to their business,” he says.

Cotten’s to-do list, meanwhile, will include overseeing Rackspace’s German expansion plans. Overseas business development is an area he has past experience in, having served for three years as the firm’s international managing director between August 2013 and July 2016.

“We are establishing a German datacentre to serve our European customers and help our expansion efforts into the Dach region,” he says.

“We’ve opened up our sales and marketing office in Munich, so that is a big focus and priority. It will be the only new market expansion Rackspace will do in 2017.”

Making it big in multi-cloud

Given the firm’s positioning as a managed cloud service provider, the company is also poised to capitalise on the growing enterprise demand for multi-cloud management support.

“We are the multi-cloud leader in the industry, because we provide services for VMware, Openstack, AWS and Azure, and can help our customers across a wide range of platforms,” says Cotten. “They’re not just walked into one underlying cloud platform.”

The company’s background and experience of running a public cloud business will also come into its own here.

“We have a very unique experience in the market due to the fact we were a managed service provider for the first 10 years of Rackspace, and we had to develop our own public cloud – which was built on Openstack – that we ran and scaled,” he says.

“At one point, Rackspace and Amazon were the two biggest public clouds in the world, and because of both of those unique experiences, we believe we are the only service provider in the world that can take a service culture and combine it with how to build and scale a public cloud and put that to use for our customers.”

“We can help our customers across a wide range of platforms, so they’re not just walked into one underlying cloud platform”

Jeff Cotten, Rackspace

This, in turn, has given the company a good handle on what enterprise cloud customers are looking for.

“Our customers are on a journey to cloud, trying to figure out how to scale their applications for variable workloads or deal with holiday surges and traffic,” says Cotten. “Rackspace understands that well because it’s had to do it across hundreds of thousands of customers and scaling in public cloud.”

“It’s also had a unique experience of how to leverage multiple availability zones to design for resiliency so it can put that expertise to work for its customers to make sure it designs its apps for failure, so they know it is designed and utilising the features of the cloud not to go down.”

With its plan of action in place, as well as new owners, Cotten says the fact Apollo has not parachuted its own management team in to deliver should be interpreted as confidence in the firm and its staff to do so.

“This is a real show and sign from Apollo that it is committed to Taylor and his decisions about the future of the company, and they believe the right talent is here. It is promoting and developing talent here,” he says.

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