Speaker 1: 00:03 Welcome to the Tech in 20 Minutes podcast, where you will meet new tech vendors and learn how they can help your business. At Clark Sys, we believe tech should make your life better. Searching Google is a waste of time, and the right vendor is often one you haven’t heard of before. Hi. I’m Max Clark.
Speaker 1: 00:18 I’m talking with Tyler Goodlett, who’s the director of sales at Rackspace. Tyler, thank you for joining.
Speaker 2: 00:24 Absolutely, Max. I appreciate the, the time. Happy to be with you today.
Speaker 1: 00:28 Tyler, for people that don’t know Rackspace, what does Rackspace do?
Speaker 2: 00:31 Rackspace really has a long history of, IT services. But, really, the last couple of years, Rackspace has transitioned into, a managed services provider of, IT as a service really specializing in, hyperscale cloud, public cloud, as well as colocation and professional services.
Speaker 1: 00:50 That description is more about, you know, IT management and services on top of infrastructure and not necessarily what the infrastructure is anymore. I mean, Rackspace’s lineage was, physical servers and bare metal and data centers. And now, you know, in the introduction of hyperscalers, it’s, you know, supporting infrastructure wherever the customer is. Right? Is that kind of accurate?
Speaker 2: 01:13 Yeah, Max. That is, actually spot on. And probably one of the most unique things about the tenure I’ve had at Rackspace, I’ve actually been with the company for 10 years. So started in the days of of selling, you know, traditional dedicated servers, Windows Linux, and watched the company evolve over time. And to be in a spot where we’re now, you know, infrastructure agnostic and can help customers move to whatever platform makes sense for their workloads has been a, has been a refreshing opportunity, and really opened up the conversation with customers to talk about what their needs are from an IT services perspective, not necessarily have to think or push a customer toward one platform or another.
Speaker 2: 01:48 It’s really about what’s best for the workload and the apps.
Speaker 1: 01:50 So as it relates to public cloud management, what problem are you solving for enterprises today?
Speaker 2: 01:56 You know, that’s a that’s a unique question, Max. If you’d asked me that 3 months ago, the question you know, the answer would have been, probably a little bit different than it is today. But, you know, with the pandemic hitting and and the work from home and and remote services and and things that nature kinda changing landscape of of what we’re helping customers do. You know, what we’re seeing today is is customers really needing help to, not only move workloads and applications to, hyperscale clouds, but help not only managing from a IT services perspective, but helping manage cost as well. We see that becoming a, a glaring need for customers when it comes to, you know, 3rd party cloud.
Speaker 1: 02:35 So when you say manage costs, I mean, you’re talking about, you know, budgeting and forecasting, or you’re talking about cost constraints and governance? I mean, what does that actually mean?
Speaker 2: 02:43 Yeah. So, you know, what’s what’s unique at least in the space that, we plan here at Rackspace is we have a lot of customers that obviously provide applications to their end users. Right? And a lot of these companies maybe aren’t selling more seats. Maybe they’re not selling more licenses, but their customers are consuming more of the licenses that they’ve already purchased.
Speaker 2: 03:02 Folks are going remote, you know, online learning, things of that nature are causing, these folks to see cost of of third party cloud and their infrastructure increase sometimes 2, 300%. Right? And that doesn’t necessarily correlate to revenues for these customers. And so a lot of where we’re helping customers today, specifically during the COVID crisis, is how can we help customers take advantage of things like savings plans on top of AWS? How can we look at the way, they’re architected on top of GCP as example, to make sure that they’re taking advantage of all of the technologies and the cost optimization that’s available on those different platforms.
Speaker 2: 03:37 So it’s it’s unique in every case. And and one of the things I like about working at Rackspace is you get a very diverse customer base. But, you know, regardless of of who you’re working with, customers wanna get the most out of their IT spend, and they don’t always know how to do that. And so that’s an area where we help customers in a lot of different ways, but ultimately get the most bang for their buck when it comes to spending on, you know, 3rd party cloud services.
Speaker 1: 04:01 It’s an interesting conversation to have here because when you say you get the most bang for the buck out of their IT spend and cloud services, this is, you know, partly, I I would say, let’s say, like, an emotional response. Like, am I spending correctly? Do I have the right, have I bought the right thing? Am I in the right place? Do we take the right approach to this?
Speaker 1: 04:19 Or it’s also kind of reactionary of why is our AWS bill, our GCB bill so expensive? Or what is it gonna be next month? Or how do we forecast this 4 months down the road? I mean, that that becomes a very both tactical and strategic integration and interaction now with the customer and helping them, you know, figure that out and and what they do with that.
Speaker 2: 04:37 Yeah. You know, the the thing that’s been unique about this transition is a lot of the conversations that Rackspace was having was primarily in the CTO, you know, VPs of IT, directors of IT, things of that nature, talking about architecture, right, cloud governance, things of of that nature. How do I move my application to AWS or GCP or Azure? And now we’re starting to see the conversation start from the, the CFO’s office. Right?
Speaker 2: 05:01 And and the CFO wants to know why his his bill for, you know, AWS has has increased so much and and how his team has lived in the platform. And so it’s a balancing act of where can we knock down and help, you know, help the customer as quickly as possible. And so what we’re seeing right now today is customers coming to us saying, hey. Help us reduce our cost immediately. That’s the most important thing.
Speaker 2: 05:24 And rather that’s leveraging, you know, enterprise discount program, savings plans, any of the different services that these third party call, providers offer, right, and helping guide customers through it, negotiating the right contracts. That’s kind of step 1. Right? And and really just helping get their spend under control. It may be more than they wanna spend, but it’s helping them get it under control.
Speaker 2: 05:45 Right? Advising them through the process. And then what we see is is really customers wanting us to help them take advantage of cloud via cloud assessments, or maybe as workflow automation, whatever it is that the customer needs based on workloads and applications. We’re starting to see it it it kinda come in a couple different steps. So really that first step is help me get my cost under control.
Speaker 2: 06:05 Help me figure out why I’m spending so much and where can I start to save money? And then from there, the discussion gets much more technical in nature, in regards to making sure that it’s architected correctly, the right workloads are on the right clouds. So it’s it’s become a very unique conversation.
Speaker 1: 06:21 Rackspace took and transitioned its support infrastructure and operations from operating data centers into a cloud practice and supporting clouds for for your customers. In addition to that, you’ve also acquired a lot of companies to enhance and and, you know, increase your cloud practice and your expertise around that. So, I mean, there was a relatively big one recently. How how does that work? I mean, what’s the decision of of that, you know, by process?
Speaker 1: 06:45 What are you adding when you, you know, leverage on and and take on another company and bring them into the Rackspace and fold? What is what is this doing for your customers?
Speaker 2: 06:53 Yeah. So I think when, you know, when when Rackspace takes a look at acquiring a new company, it’s, hey. What capabilities do our customers need? What capabilities our customer want that maybe we can’t provide or we can’t build? And, you know, there are oftentimes when we can build or enhance products to to meet our customers’ needs, and we do.
Speaker 2: 07:10 But there are times when it’s quicker and easier and and more helpful customers, quite frankly, to acquire top notch companies. And so, the most recent one that, you know, if if you do any research or Rackspace or follow us at all is, the acquisition of Anika. Anika is a very unique company, major player in the AWS ecosystem, but a very different company than than Rackspace. And the 2 complement each other quite well. Annika traditionally is much heavier in the professional services.
Speaker 2: 07:39 So helping customers move to, AWS or helping customers take advantage of AI and machine learning within AWS. Little sidebar, one of my my favorite stories about Anika is one of their, you know, their biggest projects that gets a lot of accolades is they actually built an application on top of AWS for, Disneyland, basically, to help them, manage the trash cans. Right? To to understand when the trash cans get the fullest, when should they change them, you know, which parts of the park trash cans fill up the quickest, things of that nature. So it’s a it’s a really unique company and very different than, you know, the traditional Rackspace, which is more in the managed services realm, helping keeping the lights on, being extension of your IT team.
Speaker 2: 08:20 And so bringing Anika into the fold, allowed us to really step up our capabilities around AWS. It also helped us step up our capabilities around AI machine learning, also to help customers from a code perspective. Right? To help customers develop code, help them manage the CICD pipeline, workflow automation, things of of that nature. And really the the company that they’ve built is quite unique in that regard.
Speaker 2: 08:44 And it it complements what we do on the Rackspace side quite well. And so we’ve really seen an increase not only in our AWS business from new customers reaching out for help, but as well as our our install base customers. Right? Asking, how can I leverage this relationship to move my legacy workloads to AWS? Or how can I leverage, you all from a professional service perspective to help me in these different areas?
Speaker 2: 09:08 Right? Whatever those may be. And so it’s it’s been an exciting transition, and it’s been wildly successful. Right? That’s that’s one of the things that’s been unique to watch is how quickly the two companies have come together.
Speaker 2: 09:21 And, historically, that’s that’s not very easy for 2 large IT, companies to come together specifically when they’re really 2 different verticals. Right? You have a a heavy professional services company. You have a heavy managed services company. And then to bring them together and and have them complement each other, isn’t always an easy transition.
Speaker 2: 09:40 Right? And and I’ve been through a few acquisitions at Rackspace. Some have have been wildly successful and been easy to integrate. Others have been extremely difficult. And this was one where I think, we did the right amount of homework.
Speaker 2: 09:53 We did the right amount of research, and and we we purchased a company that complements what, you know, what it is that we’re trying to do for our customers and what it is that we bring to market. So it’s it’s been exciting. It it really has. And it’s it’s like I said, it’s been wildly successful, and it’s also given us some real cloud in the AWS marketplace. Right?
Speaker 2: 10:11 Which is something that is, that is unique for us.
Speaker 1: 10:15 Rackspace is a large company. You’ve been around for a long time. You have very interesting stats. Like, you know, years ago, you bought a mall and and built to convert it into data centers. I mean, you talk about facilities and and 1,000,000 of pounds of server equipment in these data centers.
Speaker 1: 10:29 As part of that, also that size, you have a lot of international presence. And this isn’t a you’re not a US focused company anymore. You see LatAm. You see Asia Pacific. You know, we see Europe.
Speaker 1: 10:40 These are all very distinct segments and focuses with Rackspace. I mean, how how did that come about? And, really, how do you approach customers that are multinationals now or, you know, not HQ’d in the US to, you know, support their operations and make their lives easier in the process?
Speaker 2: 10:58 Yeah. So, interesting stats about Rackspace. Right? And I think, you know, the fact that we have global reach is is definitely something that makes us unique. We, as a company, have, you know, a little over a 140,000 customers in a 150 different countries.
Speaker 2: 11:14 Right? So we don’t have 1 or 2 folks, spread throughout the throughout the globe. We we operate at scale. We have over 40 data centers. Those are Rackspace data centers.
Speaker 2: 11:23 That doesn’t include, you know, our relationships with AWS, Azure, and GCP, which extends our data center reach as well. And so really we we’ve over the years built a follow the sun model for servicing our customers, which really allows us to continually provide, you know, our 3,000 plus cloud experts to our customers on a real time basis. Right? I mean, that’s that’s one of the things that makes Rackspace unique is is this notion of of fanatical support, really the DNA of of what we were built on. And to be available, you know, 247, 365, not only to answer the phone and and say hello to our customers and help them with issues, but to actually have the scale and expertise to fix their issues, at whatever time that they call us or whatever the issue might be that they they need our help on.
Speaker 2: 12:08 You know, and I I really feel that that comes from the 20 plus years of of managed services experience that we’ve had and the rigor that we’ve built into our company. You know, of course, over the years, things like automation and and and helping alleviate ticket flows and backlogs and things of that nature have made us more effective at putting the right level of engineers on the phone with the customers at the right time. But it’s something that we continually work on. Right? We are always looking at ticket times, success rates of of tickets, the how complicated the tickets are that come in, you know, what our customers are rating us on, you know, solving those problems for them.
Speaker 2: 12:42 So, you know, it’s always a work in progress. Right? It’s it’s never good enough. It’s always gotta get better, but it’s something that we continually work on and focus on to make sure that we deliver to our customers at scale globally. Right?
Speaker 2: 12:53 Whether they’re US based or APJ or whatever the case may be, every customer is unique and different and needs to be serviced in a different way. And we provide that unique experience to our customers regardless of where they need to host, regardless of where they’re located. It’s really about servicing the customer and their needs at whatever scale is is appropriate for their business.
Speaker 1: 13:13 With a 140,000 customers, this is obviously not something where you’re targeting, you know, fortune 100 or fortune 1,000 only. So in that base of business, who becomes a good customer profile? Like, what’s a good fit for Rackspace? I mean, is it verticals or and I mean, obviously, not geography where you’re you guys are spread out 150 different countries with customers. So who would be a good fit for you and and vice versa?
Speaker 1: 13:38 Like, if I’m a customer and, you know, running a company, you know, how would I know that Rackspace would be a good fit for me?
Speaker 2: 13:43 Yeah. And I think, you know, looking at you know, and this is, you know, inside out view from my perspective. But, you know, Rackspace was built on the SMB business. Right? When in 1998, when we were founded, we primarily service the the small business market.
Speaker 2: 13:56 But as we evolved, right, we we gained more competencies. We had more complexity in the portfolio. We started to appeal to different size customers. And so we’ve, you know, called walk run into different segments. And, you know, I think looking at Rackspace, it really comes down to what are mission critical applications or where areas that that we can help.
Speaker 2: 14:16 And I do have customers ask me all the time, what’s your specialty in regards to a vertical? Well, that’s that’s another unique thing about Rackspace. We have folks that are in health care. We have folks that are in, you know, financial services, you know, software, really across the board. We don’t have one particular vertical that we specialize in.
Speaker 2: 14:35 And I think that’s what makes Rackspace unique is is we do appeal to a lot of different customers, both small to enterprise. And, you know, small customers, we appeal to them in in ways that that are unique. We we can help deploy things for them at a much lower cost. Right? There’s there’s not a big CapEx outlay.
Speaker 2: 14:52 We provide them expertise at scale, right, and and things that they can’t necessarily get or talent they can’t necessarily attract. You get into the mid market space, and we appeal to them again, talent. Right? Rackspace has a unique, you know, you mentioned them all, but we have a very unique culture that attracts people and we have a very low attrition rate, specifically on, you know, our IT bench. Right?
Speaker 2: 15:14 And and we promote education and and we promote certifications and things of that nature. We always wanna make sure we have the right talent and the right people to help our customers. And so, you know, in the mid market space, depending on what specifically you’re looking at, it’s hard to find cloud experts and cloud engineers, and it’s hard to keep them. Right? Same thing with security.
Speaker 2: 15:32 Those are all areas that that are difficult to attract and maintain talent. I think we appeal to those customers because we give them that extension. Right? We we help them. When you get into the enterprise space, there’s still some of that, of course, but I think it’s it’s a different story in the fact that, you know, we provide enterprises ways to consume multiple clouds under a single pane of glass.
Speaker 2: 15:53 Right? Single bills, single management, those types of things become extremely convenient. Besides that, I think, you know, for the enterprise specifically, it really becomes, around you know, what becomes important is the fact that Rackspace’s track record of uptime and reliability. Right? When it comes to running a mission critical application, there’s nobody better than Rackspace.
Speaker 2: 16:16 And so I think that’s where, you know, you see a lot of the large fortune 100 companies leverage Rackspace. It’s not all of their IT needs. We don’t we don’t host all of their applications, whether they’re internal or external. But what we do host is their most mission critical applications. Right?
Speaker 2: 16:29 Whether they’re revenue generating or they’re critical to back office, whatever the case may be, that’s really where you see enterprise leverage Rackspace.
Speaker 1: 16:37 Part of your, you know, SMB mid market enterprise is customization, and we see that reflected in in your cloud practice with service blocks. Run me through what a service block is and how this actually layers on for a customer. You know?
Speaker 2: 16:51 So, you know, the the unique thing about Rackspace is it was always kind of a a buffet menu of of services. You know, we provided many services in the end. And that was the, you know, the the DNA of Rackspace. As we moved into, the hyperscale cloud, right, we have found that, customers wanna consume services differently. Some customers want full end to end white glove managed services as to where other customers may want different components, and they wanna be able to Lego block those components.
Speaker 2: 17:21 And so that’s that’s really what becomes unique with our service blocks as we allow customers as much or as little customization as they need. And so, you know, the the service block concept is really quite simple. It’s providing the people, the process, and the tools for a customer to be successful. So, you know, our base level kind of minimum support level is what we call platform essentials. Platform essentials is a enterprise technical account manager available to you 247, 365 to help you troubleshoot, answer questions.
Speaker 2: 17:51 And within that block, we also offer our cost optimization tooling. So that is a, a unique component that’s different than, as an example, AWS enterprise support. Right? We wanna make sure that we always provide our customers a unique experience. But from there, you know, it it really depends on what customers are looking for.
Speaker 2: 18:09 We we step into the next level of service blocks, which is manage and operate. That’s allowing Rackspace to not only manage your cloud infrastructure, but also operate it, update patching, really break fix type type work. From there, you get into complex cloud operations that’s providing you a certified cloud engineer at different hours per month depending on what it is that you’re looking for all the way to a dedicated resource available to you 247, 365. We also offer architect to deploy services. We typically see customers add that service block on in the beginning and then delete it as things are are deployed.
Speaker 2: 18:44 And so, you know, those are really the keys of the of the service block offering. And then from there, there’s obviously some unique service blocks that customers take advantage of, on a one off basis. You know, we have cost optimization or cost optimizer as we call it, MCO service block customers usually leverage that on a quarterly or or some customers leverage it monthly. It really just depends on, what they’re trying to accomplish. But the, you know, really the the goal of the service blocks is to allow customers to pick and choose what they need when they need it so they get the most out of their spend, both from an infrastructure perspective, but as well as the services perspective from Rackspace.
Speaker 1: 19:21 Awesome. Tyler, we could go on and on and on. I’m sure. Thank you so much for your time. This has been great.
Speaker 2: 19:27 Yeah. Absolutely, Max. Thank you for having me. I appreciate it.
Speaker 1: 19:31 Thanks for joining the Tech in 20 Minutes podcast. At Clark Sys, we believe tech should make your life better. Searching Google is a waste of time, and the right vendor is often one you haven’t heard of before. We can help you buy the right tech for your business. Visit us at clarksys.com to schedule an intro call.
