In Cloud Wars, Don't Forget No. 2 Rackspace

Rackspace is in the mix of cloud pricing war

Apr 3, 2014 at 1:00PM

WinterThis story originally written by Nancy Gohring at CITEworld. Sign up for our free newsletter here.

With the cloud pricing war taking place over the last week, you'd be forgiven for thinking that Amazon, Microsoft and Google (NASDAQ:GOOGL) (NASDAQ:GOOG) are the top cloud providers. But a report out this morning from RightScale throws another vendor in the mix: Rackspace (NYSE:RAX).

In RightScale's annual State of the Cloud Survey, the company surveyed more than 1,000 businesses and found that Rackspace was the second most used cloud, behind Amazon Web Services. Google App Engine, a platform as a service, comes in third.

Don't miss: In defense of higher cloud prices

However, what's notable about the survey is that around 80 percent of respondents are small and medium businesses. In addition to the overall ranking, Rightscale breaks out usage by enterprise or small and medium business.

Those results show that Rackspace and Google rank lower among enterprises. They'll need to figure out how to attract enterprise users, which tend to generate more revenue, if they want to stay competitive.


Source: RightScale

Among enterprises, RightScale found that AWS is the most used followed by VMware vCHS. However, RightScale cautions that VMware vCHS, the public VMware cloud offered by VMware, hasn't been out that long and, based on follow up interviews, RightScale found that respondents were likely confused and in many cases aren't actually using the service.

Azure came in third and fourth place with its PaaS and IaaS with Rackspace in fifth and Google App Engine next. Google's infrastructure service was ranked eighth.

Among enterprises, the rankings make sense. Many businesses have long relationships with Microsoft and so turning to Azure may seem more logical for running important enterprise apps than Google.

Rackspace has been working hard to try to attract enterprises but has long been known as a provider suited to smaller businesses. While it's doing better than Google in attracting enterprise buyers, the RightScale survey indicates that enterprises may be more interested in Google than Rackspace. Seventeen percent of the enterprise respondents said that they are experimenting with Google's infrastructure service, compared to 14 percent experimenting with Rackspace. Twelve percent said they plan to use Google's infrastructure service compared to 11 percent who plan on using Rackspace.

Service providers like Rackspace and Google face a challenge getting into the enterprise but it's not insurmountable. After all, Amazon is traditionally a consumer company but managed to secure 49 percent of live apps among enterprises in the RightScale survey.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

CITEworld has no position in any stocks mentioned. The Motley Fool recommends Google (A shares), Google (C shares), and Rackspace Hosting. The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information