Rackspace May Dabble Its Way Into Cloud Silver Lining

(MoneyWatch)  Rackspace, normally associated with server co-location and hosting services, will be using a hybrid approach to cloud computing, letting customers switch between hosted data centers and cloud computing resources. Although it may not appear as "pure" as what some other major vendors tout, the company is smart, honing in on the needs of the buyer in a way that will let enterprises move over to the new approach slowly. So long as competitors keep trying to positioning themselves as "all cloud, all the time," this approach alone could make Rackspace a major winner.

Lew Moorman, Rackspace's chief strategy officer and president of the cloud services business, told ZDNet's Between the Lines that a hybrid approach would appeal to "dabblers". Cloud computing will be behind a firewall and eventually tightly knit to with Rackspace's dedicated hosting services with networking services that the company has to develop.:

When finished, Moorman sees customers mixing and matching technologies with the cloud. For instance, VMware and a company's database may live on a dedicated server, but Web apps and archiving might be offloaded to the cloud. The key is to make these platforms operate seamlessly. "When finished it (this hybrid approach) will automatically link your private network to cloud securely so it looks like one seamless network," said Moorman. Simply put, some applications like enterprise resource planning software, are likely to stay on dedicated computing resources.

What is so intelligent about this approach is that it recognizes business reality and some of the underlying concerns of CIOs. They don't want to ignore new technology, but it must be solid enough to reliably run their systems. At this level, bets on new approaches make or break careers. Should Rackspace manage to build the necessary networking tools and roll out the approach quickly enough, it would enjoy several significant competitive advantages:

1. Rackspace already has a strong reputation as a hosting company -- read that as service provider. Technology vendors, even those like IBM with a big consulting component, that have historically made much of their money from their own software or hardware have to overcome the perception of being tied to their offerings.
2. The company's reputation and historic positioning also means that it will be seen as understanding not just the technical needs of corporations, but the support and business issues as well. Given the varied range of companies claiming to be cloud computing providers, understanding the broader customer concerns will become a valuable distinction.
3. Large enterprise CIOs will not pull their companies wholesale into cloud computing because of the risk of things going wrong. However, having an option to move from the known quantities co-location or hosting over to cloud services in a gradual way should be appealing.

Because Rackspace is not tied to a history of being a vendor, it is also opening its cloud API to third parties that will then be able to build offerings on the platform. And that may be the smartest thing of all, because third party support is ultimately what cloud computing must be about, if it's not to become simply another term for hosted software.

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