Max: 00:03 Welcome to the Tech Deep Dive podcast where we let our Internet come out and have fun getting into the weeds on all things tech. 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, and I’m talking with Steve Mills, who’s the senior vice president and GM of the Americas for Rackspace Technology, and Tyler Goodlett, who is senior director of sales. Guys, thanks for joining.Steve: 00:28
Hey. Good morning, Max. Thank you. Thanks for having us.
Max: 00:31 Steve, I’m I’m sorry. I have to out you here for a little bit here. Your LinkedIn says that you started with Rackspace in 2006 as an intern.
Steve: 00:38 That’s true.
Max: 00:38 Left and and was and then you worked in help desk for a little bit over a year. And in the 14 years since then, you have worked yourself up to running the Americas for Rackspace. That is a heck of a haul.
Steve: 00:51 Yeah. And there, there certainly was that little gap between being an intern and and full time. So, in in between that, that little stint, I was actually a cook at a Greek food, place called Dimo’s. So, it’s a pretty interesting tale indeed.
Max: 01:06 And, Tyler, you’re not in much better shape. You’ve you’ve been with Rackspace for about 10 years now too. Right?
Tyler: 01:11 Yeah. Funny enough, Steve and I actually went through the, 2 week sales onboarding training together that we had many, many moons ago. The the program has now moved to about 4 months, but Steve and I, were expected to learn it in in 2. So it was a a really unique experience to get to go through that together.
Max: 01:29 Yeah. So this is something that’s always struck me. If you’ve ever done a Zoom with somebody at Rackspace, I mean, there’s banners hanging behind people’s desks, 5 years, 10 years, 15 years, 20 years, 25 year. You know? And it’s not an atypical story for Rackspace.
Max: 01:43 I mean, Rackspace really does retain staff for a really, really long time, and that is a very atypical in the tech space in general and sales even more so.
Steve: 01:55 That’s right. Yeah. Well, I I would say it’s probably you know, we we call ourselves rackers. We always will, Tyler and I. I I guess we would be considered old school at this point given our tenure, but, I mean, there’s people that have been there for 20 years.
Steve: 02:08 You know, there’s there’s folks that are ex Rackers that we still celebrate the same way, our founders, Graham Weston, etcetera, that have just stayed with it the whole time. But how we, how we manage the culture, how we think about retaining top talent, I mean, that’s all it’s all core to what we do, and it’s, it’s one of the most fun parts about working there. But, yeah, we we love celebrating, the the flags and, you know, every milestone that goes with it.
Max: 02:32 And Rackspace right now is going through a period of reinvention as well. So the company started as a dedicated server, what we call bare metal nowadays. You know, a dedicated server company got really good at scaling and and bringing equipment online and managing equipment for companies. Right. And, really, this this shift, I mean, I don’t know exactly when the flag is, right, in the sand.
Max: 02:52 But, you know, 2, 3 years ago, there’s there it became this pretty big shift into public cloud and this this concept of hybrid cloud. I mean, what what how did that transition come about, and and and what’s what has that looked like over the last, you know, x years?
Steve: 03:06 Yeah. It’s a good question. And so, you know, I started in in 2006. I’ll kinda give you the the quick history lesson in how we think about the company transforming itself, what drives us, why we do it. But so I joined I joined in 2006, tail end of the startup days right before we did our, IPO originally in 2008.
Steve: 03:25 And so there was, you know, at that time for us, a primary focus around managed hosting to your point. Bare metal servers managed out of our data center. The big revolutionary part of our offer and what became the core of Fanatical experience as we still call it today was that we would manage all the way up to the application tier for customers. So we could get servers online, bare metal faster than anyone at the time, and we offered more service. And that carried us from a growth perspective for effectively a decade.
Steve: 03:58 It was going know, extremely well. Obviously, the emergence of public cloud, technology providers like AWS and others created a little bit of, of competition at the time until we sort of had, I think, this, and I I can remember the point in time where we created OpenStack, which was our own competitive public cloud offer. We still, in fact, are managing the largest, OpenStack public cloud still to this day. But there was a secular moment where we realized that customers actually really want hybrid. They want choice.
Steve: 04:30 That’s what we were calling it at the time. It was bare metal private Cloud with Rackspace plus our public Cloud operate together. And for customers, that allowed us to take a very nice workload driven approach, etcetera. But when AWS, to my other point, and others started popping up, we realized, hey. This is just another great cloud technology.
Steve: 04:48 We’re never gonna be able to innovate from a product standpoint, the features, etcetera, as fast as they are. But our customers want to adopt it. They wanna leverage it for other workloads, and that sort of put us down the path of multi cloud as we think about it today. But, ultimately, in the end, we’re always gonna be a services partner for our customers, and we’re always gonna look at the various parts of our partner ecosystem and the different parts of the multi cloud or hybrid cloud portfolio as, you know, just options for our customers, and and we try to help advise them on which workloads go best where and and take that very unbiased approach. So I have a feeling we’ll stay down that path of transformation for for many years as we evolve with our customers.
Max: 05:29 You said something that just now that was, I think, key to this whole story here, which is managing the infrastructure for the customer up to the application stack. That’s right. Most companies now, and especially since the cloud has become so popular, care less and less about the physical infrastructure. I mean, some people still get into this dialogue if I wanna, you know, fill in the blank server model spec. But when it really comes down to it, most people just say, hey.
Max: 05:54 I have this application. I need to run this application. I need it to be available for my employees, my customers, my staff, my machine, my whatever it is. And I don’t really care what it’s running on. Just make it work and make it and make sure it works all the time.
Max: 06:05 And that commoditization of infrastructure happened in the server world and even in the the network space some time ago, and it really also you know, it’s moving forward also into the public cloud, the hyperscaler environments as well. Right. And it’s a good story. Right? You know, it’s it’s because people I mean, do people really care if they’re in AWS or GCP or Azure?
Max: 06:24 I mean, to some degree, yes. But, I mean, to other criterias, like, is that really the center of the conversation, or it’s just I have this application. I need it to work. Can you make it work for me?
Steve: 06:32 Right. Yeah. I think it’s, it’s interesting. It shifts, I think, a little bit and kind of goes through cycles. But I will say more and more, I’m hearing customers talk about app portability.
Steve: 06:42 I want to just be able to to make sure it’s up and running, make sure that it can scale, make sure that it’s secure. It’s much more focused on what outcome am I trying to deliver. Now, there are certainly different places where economics play in, and you can see different outcomes depending on where you choose to place your application or your data. But generally speaking, I think it’s a workload by workload discussion. There’s obviously many companies that are born in the Cloud, start Cloud native day 1, and are leveraging more advanced techniques around containers, serverless, and can truly distribute their application wherever they want it to go and they can move it quickly, build it up, tear it down, etc.
Steve: 07:23 But there’s many customers that are still balancing, how do I get to that with this big legacy footprint? Do I you know, when I say transform it, do I mean I’m just gonna lift and shift it? Am I gonna refactor it? Am I gonna sunset it? And so it really is more of a workload by workload case.
Steve: 07:39 But, yeah, I think I think you’re spot on. I think the concept of where you’re actually hosted matters a lot less nowadays. It’s more about what outcomes are you driving.
Max: 07:48 App portability seems like for most people, it’s a goal. It’d be nice to be able to say, hey. We have app portability, and we can instantaneously migrate from this environment to this other environment. In practice, I feel like that is a rare unicorn in the world. Not very many people can really affect and say I mean I mean but it’s true.
Max: 08:07 Right? I mean, look at the amount of infrastructure that runs in a single region or a single availability zone on a public cloud today. I mean, that is the normal environment where most people are constrained into a single AZ in a single region, let alone being able to say, hey. I can dynamically shift workload between this cloud, that cloud, my own physical environment. I mean, that’s that’s a future state that that a lot of places have not quite achieved yet.
Tyler: 08:28 And one of the you know, Max, to that, not to to interrupt you, but one of the things that I think, this pandemic has really helped accelerate, obviously, adoption of cloud, work remote, all those things that we’ve seen. But that conversation has become the forefront of the majority of of the conversation that we’re having with customers today. It’s how can you give me that flexibility? What professional services that can you provide to help us be able to be in that position to move workloads when necessary, to move workloads based on maybe financial decisions or whatever the case may be. And so you’re really starting to see that accelerate, which has been, you know, kind of refreshing, to be in some of those conversations.
Max: 09:03 But it’s not I mean, this isn’t a, like, hey. I’ve just decided tomorrow that I wanna move from, you know, we’ll just say Amazon to Google. Right. I mean, it could be Google to Amazon. Amazon I mean, there’s there’s lots of permutations of this thing.
Max: 09:14 This grid becomes very complex pretty quickly. Right? So it’s not just saying, hey. I wanna move from vendor a to vendor b tomorrow. I mean, there’s a lot that goes into this.
Max: 09:21 And this is something that Rackspace does help people with and figure out, hey, you should be here. You should be over here instead. You’re you have this goal that you’re trying to get to. So I mean, how much of that conversation is driven by technology? And how much of that conversation is driven by the CFO and the financial realities of of running these applications now?
Steve: 09:41 Yeah. It’s a that’s a really good question. And and to go back to the prior point, though, for a second, I I think, you know, app portability certainly is more the dream than the reality, and it’s really more like apps, Right? Plural for many of our customers. And I think that’s really an important nuance, especially as we we think about the other side of your question, which is, you know, is it technology driving the decision, or is it the business driving the decision?
Steve: 10:03 And how how realistic is it to actually manage through that? One, I would say and and, Tyler, I’d love to hear, you know, your your opinion after working with a a lot of customers and partners. But I feel like it’s more the CFO, the CIO yeah. Our COO rather that’s that’s driving a lot of that decision nowadays. And it’s you know, right now with COVID, to Tyler’s point, you know, it’s more about I need to get there to save costs, to drive this outcome, to be able to spin up this new type of business model so that we can react to the world differently.
Steve: 10:32 And that’s that’s a great catalyst, but, you know, ultimately, you can’t have one without the other. You always have to marry it back to a technology discussion because there’s so many dependencies. And, you know, even if it were, hey. I wanna move from AWS to GCP. Just even mapping out the the migration, understanding all of the, you know, dependencies that go into it, just that one aspect is very challenging.
Steve: 10:54 And so interact space, right, to your point that is what we focus on with our customers is not only to help them understand what the options are, but to provide that, and I’ll say it again, that unbiased advice around what is the right outcome, which workload should go where, and ultimately, how do we, you know, drive whatever outcome you’re looking for, whether it’s, I want to be more flexible and more agile in my deployment model, or I actually want to install a, you know, a true DevOps framework, start building a CICD pipeline, etcetera, or as simple as I just need to save money. I mean, all of those are, you know, typical conversation starters. And where it goes, it it, you know, it really depends customer by customer. But we do have a pretty good view and and playbook around it.
Max: 11:36 I feel like anybody who’s been involved with tech for a long time, there’s a sense of, like, oh, there’s this new shiny thing out there, and it has benefits for the you know, for our our business, and we can improve in operations with it. And taking that and bringing that into an organization, you know, is reflected on, like, oh, you just want the new shiny toy. Like, this isn’t we’re not gonna do it. And so that’s why I was asking, like, what else actually drives these things? Because a cloud migration, there’s a lot of pieces that go into these things.
Max: 12:05 I mean, nowadays, we talk about data center to cloud migrations are relatively I don’t wanna say easier, but it usually is, the timeline is more specific. Hey. We have a contract that’s expiring. We have equipment that’s aging out. We have some kind of event that’s that’s driving the shift now for us beyond just a a financial conversation of trying to switch from a capex to an opex or or this to a that or these sorts of things.
Max: 12:28 It’s more of a, hey. If we don’t do this by this date, our contract renewals and we’re stuck for another half or many years. Right? And when you talk about, you know, in the public cloud space, you know, the equivalent of that is reserved instances or maybe you’re on some sort of, you know, an agreement discount program with the cloud provider itself. But that migration process, if especially at scale, I mean, this is not a simplistic thing.
Max: 12:51 I mean, these things Right. 6 months, 9 months, a year, year plus worth of migration projects that come into it. And so how does and and that also is very expensive. I mean, running 2 at the same time is not a cheap endeavor. I mean, this you have to have a lot of will with the organization from a lot of different places the organization to actually affect this change.
Steve: 13:08 Right.
Max: 13:09 How does Rackspace I mean, how do you help with this? I mean, how do you walk a customer through this process of, you know, hey. Somebody woke up one day and said, hey. I think we should go multi cloud, or I think we should go over this other cloud. What does it really look like though in terms of your engagement and going through that process up into the actual, like, we’re gonna make this decision to do it and then after the decision to do it.
Steve: 13:29 Yeah. No. Maybe I’ll answer the the sort of first part here and then let let Tyler jump in with maybe some real world, customer experiences that he’s had recently. But, you know, if I if I just take it from the top, right, the most common conversation we start with is, I need to move to the cloud. Right?
Steve: 13:46 Everyone has this strategic imperative that they have to get there if they’re not already there. For those that aren’t already there, I think the reality is they just realize they’re so far behind market. They’re losing competitive foothold by being stuck in a data center, in a colo facility, whatever the case may be. That’s a mentality shift that I I think has been happening for quite some time. But, you know, when we actually get into, okay, you wanna move to the cloud, what does that actually mean?
Steve: 14:14 There’s so many different versions of what cloud adoption looks like. And it’s it’s not a it’s not an endpoint. It’s the most important thing that we have to stress to our customers, to anyone that we’re helping. It it truly is, and I hate to use, you know, a a jargon phrase, but it really is a journey. Right?
Steve: 14:29 There’s there’s really no start or stop if you’re doing it the right way because it’s about continuous improvement over time. And that’s that’s one of our pillars that we focus on with customers is, okay, you want to get to the cloud. You think AWS is the right option because that’s what your board talks about. That’s what your buddies talk about. That’s what your team talks about.
Steve: 14:47 But let’s actually unpack that. Let’s take a look at, you know, what your you know, what workloads you have today, what are the requirements, how do you think about security, do you want to be multi AZ, does that work for you from a cost perspective, or is there some scenario where you step your way into it by moving to, let’s say, private cloud first and then have a portion that’s, you know, hybrid connected out to the cloud and so on and so forth. But that’s just my view in terms of, one, I think if if our customers haven’t already started making a move, they’re way behind. And COVID, I think, has made that even more apparent for, for, you know, most folks that that were in that camp, let’s say. And then the get to the cloud part, you really have to unpack it because there’s not a one size fits all.
Steve: 15:30 There’s not a predetermined destination that makes the most sense, I I don’t think. But, Tyler, what’s your take, and and what are you what are you hearing from customers as you walk them through kind of our time tested model, if you will?
Tyler: 15:40 Yeah. I think the thing that I find most unique, and really it’s it’s COVID, I think, sent it to the stratosphere, but I think it’s been going on for some time. But, you know, to see the push from top down rather than bottom up for technology, I think, is very unique. But I think it’s also put a lot of pressure on the technical folks, right, to deliver on these projects, keep businesses running. And so as we get into these conversations, the the unique, piece about Rackspace is we really have to suffice 2 groups.
Tyler: 16:07 Right? We have to suffice the business buyer. Right? We have to talk to them about what is the journey actually gonna look like? What are the milestones?
Tyler: 16:15 What are the financials gonna be? You know, when are you gonna be experiencing double bubble versus when you’re not? You know, when is the the professional services statement of work gonna hit? So when are you gonna have a cash outlay? All of these things that they care about.
Tyler: 16:28 Right? So there’s always the track of making sure that you can tie off with them from a financial perspective to make them comfortable with the path that you wanna take them on. And then secondarily to that, there’s the actual real life work as I call it, but the actual technical track. And it’s making sure that you have all the right players on both sides of the fence committed to different timelines, right, committed to delivering on certain milestones, being able to test, being able to make sure that we migrate on time, may able to make sure that we have cutover dates identified, all the things that matter while we manage to contracts expiring and auto renewal contracts. And so the the depth of the conversation has dramatically changed, right, to the point where, you know, we know as a customer wants to move, for example, to, know, a multi call strategy or or whatever their their end state is, you know, we’re looking at what are their current contracts in place, when do they expire, what are the ETFs associated with it.
Tyler: 17:22 And so it’s a it’s a holistic view that you have to be able to tell a story to 2 really different audiences in order to be successful and for the customer to have confidence in your ability to deliver. And so I would say that’s one of the things that’s most unique is just the level at which we’re working with our customers nowadays is very different than it ever was.
Max: 17:41 And something that I’ve seen Rackspace do with customers is help them, let’s call it, financial engineer these migrations. Yep. Because there is a significant financial commitment and component to these things. And, actually, can you can you talk about that a little bit what that entails and what what people see with this? Because I I think this is a very interesting aspect of of what this is.
Steve: 18:01 Yeah. That’s that’s a great great point to focus on, and I was actually gonna dovetail off of something that Tyler had mentioned as well, which is, one, it it is it is a very detailed, in-depth conversation. It’s one that is fraught with I don’t knows, gotchas, didn’t think of that along the way, and we see that every single day. So, one, when it gets down to, you know, something really important like financial modeling, we can actually manage that extremely efficiently for our customers. So, one, we can we can build the model for them, really go through the paces of understanding, is it gonna produce the outcomes you’re looking for, where are the overlapping fees, etcetera?
Steve: 18:38 Then on our side, because we we have so much muscle memory around being able to actually help customers walk through that, we’ve built our model in a way to where we can be creative, very flexible with our customers. As an example, we can actually build in, you know, migration time, ramp schedule, you know, schedules, things of that nature within the agreement to actually help customers completely avoid the double bubble cost that goes into the actual migration. That’s one example. On our professional services, you know, engagements, you know, depending on which model we land on, exactly what the scope looks like, we could get really creative in terms of having, you know, those expenses sit later or that’s modeled in. But generally speaking, I I can’t think of a a scenario with the customer, especially within the last year, year and a half, where we haven’t been able to financially engineer, to your point, Max, a situation where they can make the move without any overlapping costs or without the savings realized within 1 to 2 years of of everything that we’ve modeled out.
Steve: 19:36 We’ve I think we’ve really dialed in how we think about it, and I think we’ve we’ve really got ourselves and our customers into a situation where they have optionality, 1. And because we’re such a large partner with AWS and Google and Microsoft and Dell and VMware and all the major technology providers behind our our, services offering that we have good leverage, we can help them really navigate getting to, you know, the best financial outcome really quickly no matter who who we’re leveraging behind the scenes.
Max: 20:07 Going multi cloud, I mean, from a technology standpoint, it requires you to be somewhat not bought into that cloud’s managed services ecosystem. Right? You can’t be too into their native databases or their data you know, calling for storage or, you know, there there are certain requirements that go into it. But Yeah. What I do see a lot is I see application workloads all of a sudden shift.
Max: 20:27 You know, data analytics, data warehousing, and machine learning. All of a sudden, this, like, this carve out happens of, like, oh, this thing should go over here and boom, it goes. And and that’s something else that you guys help people with understanding. Like, hey. You’ve got this application.
Max: 20:41 It’s running. It’s doing x, y, and z, and it should really run over here. So not necessarily I I think people hear multi cloud sometimes and think, like, oh, we’re gonna we’re gonna run the same application multiple places at the same time, but that’s not really what multi cloud is for most people. Right?
Steve: 20:54 Yeah. No. I mean, there may be a multi cloud Doctor scenario, right, disaster recovery, where you wanna you don’t wanna have it on, you know, both both cloud providers as an example. Right? So there’s some decisionality that goes goes along those lines.
Steve: 21:08 But when we when we describe multi cloud, it’s really if you think about fully packaged workloads, right, all the RAM, compute, storage, you know, data apps, you know, security as an example, however you wanna classify a workload package together, workload 1 may be on AWS because that’s the right fit. Workload 2 may be on Google. Workload 3 may be on bare metal, leveraging Kubernetes. Right? We have to we always have to think about it that way and talk about it that way because people do genuinely get a little confused.
Steve: 21:37 Right? It could be, hey. Why would I have my application running on every single platform simultaneously? Usually, that’s that’s actually not the best outcome, at least, you know, from an experience or a technology standpoint. But one real quick one thing I do wanna comment on, Max.
Steve: 21:52 One of the first points of advice if customers are at the point where they’re adopting any cloud provider, we do give that advice of avoiding those, highly proprietary managed service offerings. Right? Or or you know? It it it just leads to lock in that’s hard to unwind later, or you could think about it in terms of technical debt. But if you, if you inherently don’t wanna choose a single platform and stick with it forever, then, generally, it’s it’s best to avoid that if you can.
Max: 22:19 Yes. And they and they also get very expensive very fast, I think. Some of these
Steve: 22:23 That’s always the trick with it. Right?
Max: 22:25 Let’s let’s segue first for a second because of that. Running in in public clouds gets very expensive very quickly. I mean, this is not for most I think for most companies, when they look at these things, the reality of the migration isn’t necessarily cheaper than what they had beforehand. It’s not and cloud’s not about it. It’s gonna be cheaper for you than than what you had.
Max: 22:47 So as a service provider and as a, you know, partner helping a company through this journey, I mean, how do you explain that and talk people through this transition of of what they’re actually in for and what they need to prepare for? Because it’s also by the way, it’s not just about this might cost you more money when you get rid of your data centers. It’s also about, hey. You have to be really careful how you configure this thing because if you’re not, like, you could have some surprises when your bill comes at the end of the month. And, like, we need to make sure that you’re ready for that and you’re prepared for that, and you’re also doing things to prevent that from happening this you know?
Max: 23:17 So how how do you help people with that?
Steve: 23:20 Yeah. It’s, it it’s definitely not an easy conversation, to be honest with you, because it is so nuanced. But it is very, very common for people to think, you know, moving to the cloud is synonymous with, I’m gonna save money by default. It it really just does not work that way. One, if you’re just doing a pure lift and shift and you’re you’re not running a truly digital native, cloud native, you know, workload or approach, you’re you’re not you’re just not gonna see all of the the benefits that you want in any respect.
Steve: 23:47 Right? It’s you know, the cloud is not inherently meant to operate just like a standard traditional data center operation might look. Right? So if you’re not spinning up, spinning down, using a full DevOps framework, go in containers or serverless where you can, you’re you’re gonna miss all of those potential savings opportunities, which, by the way, it’s not about savings. Again, it’s really about making sure that you’re leveraging, you know, this agile, scalable, highly standardized framework to actually leverage all parts of your application, hosting needs, you know, on a on a bite sized kind of basis.
Steve: 24:23 Right? So that’s where, you know, I need more compute. Great. You spin up, and you you have to spin back down, or else you don’t ever see the benefit. But it’s it’s pretty common, Max.
Steve: 24:31 We’re seeing a a pretty big resurgence of people actually who, you know, that made the big big run to the cloud several years ago actually saying, hey. We wanna repatriate back to private cloud because they realized that that technology has caught up enough to give a cloud like experience at a much more manageable cost 1 and 2 more more predictable model. Right? And I think that’s really the the big surprise people find is it’s so easy to overprovision, overspend, not maximize the benefits of the cloud, and you get that bill 3, 4, 5 months in and and literally have a panic attack. Right?
Steve: 25:06 Because it’s actually 2 times, 3 times the cost of of where you were before without, you know, anyone ever really understanding that it was coming.
Max: 25:13 Hi. I’m Max Clark, and you’re listening to the Tech Deep Dive podcast. At ClarkSays, 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. With thousands of negotiated contracts, ClarkSays has helped hundreds of businesses source and implement the right tech at the right price. You’re looking for a new vendor and wanna have peace of mind knowing you’ve made the right decision?
Max: 25:32 Visit us at clarksys.com to schedule an intro call. There there is a very specific alignment that has to be in place in order for for hybrid cloud. And, really, what we’re talking about in hybrid cloud, right, is the combination of a public cloud with some sort of private infrastructure for a customer, whether that’s
Tyler: 25:49 Okay.
Max: 25:49 You know, dedicated servers, bare metals, some sort of cloud platform, Kubernetes. I mean, that that really all encompasses this idea of hybrid cloud.
Steve: 25:56 Yep.
Max: 25:56 So you do need to have a a pretty there there’s an intersection of of size and scale and cost and and and capacity and all these things that have to kinda, you know, get stirred up together. And and then, you know, you’re a good candidate for hybrid cloud. Right. The conversation around hybrid cloud that’s always interesting to me is when you explain the outcome in terms of the cost differential from being in a public cloud to a hybrid cloud, I think a lot of people think that you’re lying to them when you actually break down the numbers because it is a striking difference. I mean, it’s it’s not like it’s you’re saving 10% or 20%.
Max: 26:34 I mean, we’re talking massive differences Right. In what the actual effective monthly cash flow is for that for that company. I mean, how do you walk into that conversation, and what do people actually you know, like, what’s normal now with Rackspace in Rackspace’s world of expectations if we’re gonna move something out of this cloud vendor and put it into a private cloud environment for customer and and what that could actually mean for them.
Steve: 26:57 Yeah. It is. It’s always a bit funny because there are strong reactions when you come in and say, no. The the savings could be as much as 30, 40. I mean, in in one of the more recent examples that Tyler and I are actually both partnering with, with this particular client, we’re talking closer to 60%.
Steve: 27:12 Right? I mean, it can be very, very dramatic in some cases, and it’s hard, I think, for for folks to wrap their head around it. Right? The the whole point of moving to the cloud was more flexible, better savings, better outcome. And then we come in and say, hey.
Steve: 27:28 By the way, have you thought about private cloud, hybrid cloud? You could save 30, 40, 50%. It’s, you know, what does that actually mean? I I just I thought I thought we were moving the other way. And the reality is it’s just how the technology operates.
Steve: 27:41 It’s about how we can manage the cost. Certainly, the market is dictating that everyone needs to be competitive. Right? And and cloud is fully commoditizing no matter which version you’re talking about. Right?
Steve: 27:54 Certainly, you have folks that focus more on the enterprise side, and maybe they have different, you know, feature sets and so forth. But the reality is compute is compute. RAM is RAM. Storage is storage in the end. Right?
Steve: 28:05 And everyone’s gonna be racing to get to to normality. What we see and why we focus on the services side of that is helping customers actually leverage, you know, what they can the best way. But the easiest way to to make it all connect, Max, is actually just put the numbers in front of them, show them the side by side comparison, and it it pretty quickly clicks at that point.
Max: 28:25 I mean, there’s a lot that goes into affecting a multi cloud or a hybrid cloud strategy. Your I mean, talk about containers. Containers are great for these sorts of things. You can’t be leveraged in on, you know, this managed infrastructure pieces and, you know, proprietary databases. I mean, there’s a lot that goes into it.
Max: 28:40 So, I mean, this is something that Rackspace is helping people understand and and work towards of, like, okay. You have this application that has this x y z thing. And and Rackspace has made a lot of acquisitions in this space in the last couple of years. Putting yourself in a position to be able to say, okay. Hey.
Max: 28:53 We can help you modify this application to do what you needed to do in order to be more, you know, malleable or or migrate, you know, in the future. And the other part of it with cost structures around public cloud versus private cloud, it’s not just about compute. There’s this little thing called bandwidth that catches people by surprise. Right? I mean, and you’re seeing this a lot.
Max: 29:16 I mean, come you know, you you don’t really realize, like, oh, I’ve got x petabytes of egress coming out of the cloud. And what does it actually mean for me in real dollars versus let’s just move that somewhere else. And it’s not necessarily saying, hey. We’re gonna save you a fortune on your compute cost. It’s just all of a sudden your bandwidth cost normalizes.
Steve: 29:33 Yeah. No. I’m, I’m actually glad you brought that up. See, I even forgot we’ve been talking about this, and I talk about it every day. But it it is one of those those little, you know, small small but very large things that, that people don’t even think about.
Steve: 29:46 And that’s something to note with with any customer that we talk to, and, you know, that could be the the make it or break it moment of actually looking at a hybrid cloud scenario versus fully moving to private cloud. Or, hey, in some cases, maybe just keep it where it’s at, and and we’ll come in and just help you optimize. Right? Those those could all be various conversation points. But the reality is you’re connecting, you know, let’s say, to a Rackspace private cloud, you know, solution, and you’re also leveraging AWS and you’re not mindful about that cross traffic, which which is your hub, you know, hub point to actually push Egress to to the world, it can get up there pretty quickly.
Steve: 30:22 And what we’ve actually gotten in the practice of doing is actually analyzing that for customers. And in some cases, just leveraging us for the back end, the really heavy workloads like databases, what have you, you actually get really good economics around some of that on a on a bare metal or private cloud solution. In in some cases, you can leave the rest in on the public cloud side, and it works well. And if you if you have the right volumes and the right deal structure, you can get good rates there. And if not, we flip it the other way.
Steve: 30:48 And on our side, at least, we can get to extremely attractive rates in all of our different geographies with with customers because bandwidth to us, it’s a cost of doing business, but it’s not something that we try to take, you know, points of margin on. We we effectively, provide it at cost to customers, especially if they’re if we’re looking at multi, you know, multi petabyte deployments, you know, is one way to think about it. So it’s always, it’s always a little interesting, but it is one of those those little, ones. If you’re not careful, it can sneak up on you.
Max: 31:15 To paraphrase to some something you said earlier. I mean, there’s there’s no right answer for for a company. I mean, there isn’t there really isn’t a right answer. It’s just a this is the best answer with what you’ve given us in terms of inputs, and and this kinda gets spit out. And then 6 months, the answer might change.
Max: 31:32 And, you know, a year from then, it might change again. And 6 months later, it might change again. So it’s it the name of the game really now is about, you know, flexibility and, you know, being able to adapt, who can adapt fastest as time changes and as their business evolves. And Rackspace, because you’re cloud agnostic I mean, you really don’t care now at this point if somebody’s in public cloud or if they’re in your private cloud. I mean, it’s it’s that has that’s a really big change for Rackspace.
Max: 32:00 It used to be, okay. We want you in our data centers, and now it’s we don’t care if you’re not in our data centers anymore. You know, it’s we’d love it if you’re in our data centers, but you don’t have to be in our data centers to be our customer. And that’s that’s a pretty big shift, and that also shows, you know, where you guys are in the market and how you’ve evolved with the market.
Tyler: 32:16 Yeah. One of the one of the other points that’s unique and that our customers, you know, really do, love the the deeper they dig in with Rackspace and the and the further they partner with us. Not only do we not care, you know, necessarily where the where you know, the workload resides and what’s best for the customer, both from a, technical and a financial perspective, but, we also give you flexibility. We know what works today isn’t gonna work in 6 months, or it may be different in 6 months. The business drivers may be different.
Tyler: 32:41 And so, you know, we wanna make sure that customers feel comfortable moving forward with Rackspace as a partner knowing that, you know, what we want is is, you know, what’s best what’s best for the workload regardless of where that is. And so there’s just inherent flexibility within, you know, the Rackspace agreements. There’s flexibility within how the the customer success teams monitor the environment to make sure you’re getting the most bang for your buck, that things are being right sized. You know, we look at every component from a switch or a firewall down to storage on a monthly basis with our customers to look at, you know, how much headroom is there? What is the performance like?
Tyler: 33:14 Is it overkill? Where can we right size? Here, how can we help save money for you all? And so that’s one of the things that I find very unique about Rackspace, that mentality to be that partner that continually changes, continually drive transformation for customers, and it’s something that, is is unique in the space. Right?
Tyler: 33:31 And I think, you know, the other thing I I find, an interesting conversation with customers quite often is when we do get a customer that is is ready to go all in with the hyperscale cloud vendor, maybe they’re coming off Rackspace private cloud, or whatever the case may be, usually very surprised that our recommendation is not to sign a large, commitment with an AWS or a GCP, as an example, out of the gate. We actually ask the customer to run for a year on top of the environment and let us really work with them to right size, migrate, make sure we’re taking advantage of things before we commit to a large contract long term. To your point, Max, you know, it’s it’s it’s very easy to get locked in, and there’s always growth initiatives in those in those long term contracts with the hyperscalers. And some folks are are on the trajectory to hit it, and and maybe 1 losing one customer may may throw them off completely. Right?
Tyler: 34:20 And so what we wanna do is make sure that we put customers in a place to be successful, you know, financially and, and technically. And so, you know, that’s another area where we really take a a methodical approach into how we push a customer, how we help them move workloads to, the hyperscalers both from technical perspective and then as well as commercial. Right? I think that’s as important as the other pieces as well.
Steve: 34:44 What I would say there because you you’re you’re bringing up what is probably the most important point if if you go all the way back to your first question of this session, which was, you know, how is Rackspace transforming itself? How will we continue to to stay ahead of that with our customers? The only thing in the end that we care about and and, you know, call it obsession, call it, you know, we’re just really weird and we’ve always done it since day 1, is fanatical experience, which is putting our customers first. So that’s the only outcome that we care about, that we’re we’re building the right outcome or outcomes, plural, for them depending on what we’re solving for. But that’s our loyalty.
Steve: 35:18 And when we do that well, we have customers that stay loyal to us, stay with us for many, many years, and we help them go through all of those different cycles of technology adoption. And guess what? 3 months, 6 months, 6 years from now, it’s all gonna look completely different. And our approach will always be the advisory services that we provide. So if I take a step back, that’s what matters most, taking care of our customers first.
Steve: 35:41 But we’ve sort of broken what is this really complicated multi cloud world into, I would say, 4 primary, solution buckets on our side. And these are the 4 4 pillars, and we continue to try and simplify this more and more over time. But we’re, multi cloud experts, so anything that falls into that bucket, whether it’s public, private, hybrid, your data center, our data center, colocation, anywhere in the world falls into that. Then we get into apps, data, and security, and each of those takes the value of our offerings further and further and further up the stack. We could do recurring managed services.
Steve: 36:16 We could scale that up and down. We can offer professional services, whether it’s migration, staff augmentation, coming in and doing really smart, you know, technical center of excellence type stuff, helping customers get to app portability. I mean, all of those are the types of things we do with our customers. And the whole point is to be flexible and to to be more agile than really there aren’t a ton of competitors in in the way that I classify Rackspace, I think, still in the market. We’re the largest pure play multi cloud solutions provider.
Steve: 36:46 Right? And there’s just not a lot of people that that can that can say they they really truly play in that space, maybe bits and pieces. And I think what, customers appreciate about our approach is not is 1, not only that we’re there for them and them, you know, as the as the only outcome, but, 2, because we’re so focused on being able to to navigate the rest of it, we simplify that for them. And they like that they don’t have to go out and get one partner for 1 piece, then somebody for the next, then somebody for the next. And I think, frankly, Max, that’s why it’s been great for us partnering with you because you you understand that.
Steve: 37:17 You take that same philosophical approach with your customers. And, you know, together, I think we we pretty much cover, you know, most of what they’re trying to to navigate, if not all of it. Right?
Max: 37:26 Yeah. And you I mean, Tyler talked about flexibility and agreements, and this also comes into spend reallocation. Right? And this is also something that Rackspace is very good about in terms of if you’ve decided that you wanna shift from, you know, private cloud to public cloud, public cloud to private cloud Right. Cloud a versus cloud b versus cloud c, whatever these different things are.
Max: 37:48 Right. You know, how do you I mean, you do help. So let’s talk about how you help people make those shifts and what that actually means to you in terms of, like, a contract structure with Rackspace. Like, when I signed a contract with you guys, like, this you know, it it’s it’s not just like, hey. You you’re committing to this box in this facility.
Max: 38:03 I mean, they’re, you know?
Steve: 38:05 Yeah. I would say, you know, think about it in terms of committing to a relationship. 1st and foremost, that’s how we think about it. So if we’re starting with 1 or 2 or 5 platforms, you know, from a technology standpoint, day 1, matters less to us. You know?
Steve: 38:20 Now now, generally, you know, if you get back to the nitty gritty of how we actually model, we do expect customers to stay on, you know, whatever they start with for some period of time. Although, you know, contractually, we don’t require it. It’s just it’s just common sense that you don’t wanna migrate every 6 months. Right? That’s that’s not an enjoyable experience for,
Tyler: 38:38 Sorry.
Max: 38:38 I I just threw it in my mouth a little bit. But
Steve: 38:41 Exactly. But yeah. So so providing that commercial flexibility, we actually have those words in our contract that allow customers to make those changes. In fact, we’ll help them spot them proactively as time goes on. We don’t want to limit ourselves from being able to contractually make those decisions so that we can operationally deliver.
Steve: 39:01 That’s the simple reality. But if we actually got into a standard engagement, we’ll come in from a presales perspective and we have all of the right resources to provide 80% of the guidance, if not 100% for our customers in most cases. But let’s say we have to get down to a very detailed analysis. We need to really figure out, 1, are you ready to move to the Cloud or are we making the right decisions? We actually have a formal program.
Steve: 39:25 It’s a Cloud readiness assessment where we can come in, do the full inventory of of mapping every single workload, every single asset, you know, whether it’s on the app application side, data center blue you know, blueprint mapping, etcetera. We can do all of that, figure out the dependencies, figure out which ones can move as is, should be refactored. In some cases, we make recommendations to actually let them sunset where they’re at depending on what the long term view is. But just as one example, that takes us probably you know, a week depending on customer, timing to work with us. And we use a mix of tools, we use a mix of our experts that actually will go and do interviews with application and, you know, I I, you know, be you stakeholders, whoever may need to be involved, Figure all of that out.
Steve: 40:11 We’ll come back, and that that becomes the framework for the rest of the discussion. And then after that, it’s, okay. Here’s what we’re advising based on what we’ve seen. We think option 1, you know, this is the best fit, purpose fit option to to map to everything that we just did. But in some cases by the way, if you can hear my, topic in the background, just, fair warning, they’re they’re in full force this morning.
Steve: 40:33 But, you know, once we have that blueprint, then we can make a lot of decisions. And then getting into how do we actually think about migration, I’ll actually, probably let Tyler jump in while I give the give a little mute relief on my end.
Max: 40:45 No. You know what’s what’s actually fantastic for me about, like, where we are in the world is is is we’ve had this sense I’ve had this sense for a long time where it’s it’s, you know, technology we get lost in technology, but but business is about you know, they’re they’re people. You know? And, you know, so our our phrase of it is is tech should make your life better. Right?
Max: 41:03 And so it’s it’s I’ve I’ve actually you know, one of the byproducts of of being everybody working from home in this pandemic is, like, you know, there’s a reality of life and people, you know, and children are part of it. So, actually, I love it. But
Steve: 41:15 Appreciate that.
Max: 41:16 So part of scale comes down to process standardization, normalization of operations, these sorts of things. And companies that haven’t gone through this this yet, maybe they’re not in a fully blown ITIL framework yet. You know, they haven’t I mean, that’s a that’s a massive massive commitment to take a company to get there. Onboarding into Rackspace’s environment, it’s both a positive and a negative, I I think, for a customer going through this experience in the sense that the amount of structure that that gets imposed, if you’re not ready for it or if you haven’t had an experience with it, I mean, there is a there is a learning curve to get into a structure, you know, because you are gonna go through and you’re gonna create inventory maps every every piece of everything where it is. Is it tagged properly?
Max: 42:02 Is it identified? Do we know what it is? And just that exploration, people find things. They’re like, oh, I forgot about that server that was underneath the stairs the last decade. You know, you have these stories.
Max: 42:10 Right? But Yeah. You know, that that process is time consuming. And I know it’s frustrating in some worlds of people like, oh, you know, why can’t you just take everything over? Well, the answer is is we can’t be you know, we have to document it so we know what’s actually running so you know what’s running as well.
Max: 42:23 And this goes to another thing which is, you know, a decade ago, IT departments in general were way more resistant to having a partner like a Rackspace come in and and take over. And I don’t wanna say take over, but actually augment their operations and how do you support, you know, environments. And I feel like IT departments understand that this is actually good for them now. You know, they they want and need this help because nobody can manage effectively a private cloud environment, a data center, and 3 different cloud vendors at the same time globally across you know, and have you know, and still and take a vacation. I mean, you just you can’t.
Max: 42:58 You need somebody that has expertise in those things that actually is staffed for it appropriately. And so I feel like Rackspace was probably the king of what became known as shadow IT of, you know, marketing departments going out and bringing up their own server infrastructure where you’re managing it for it. And then the IT department would find out about it and be right pissed off. But then the same time, you know, it’s weird because IT departments would be upset about it, but then the same time, it was like relief. Oh, man.
Max: 43:20 I don’t have to deal with this thing. Thank god. Right? And that relationship has shipped a lot, you know, for you as well over the last few years where I feel like IT is now on board and fully in, you know, on this idea.
Steve: 43:33 Yeah. Look. I think, shadow IT will always be a reality that everyone has to deal with. So sorry in advance to all the CIOs out there. We we promise we’re we’re not intending to contribute to that.
Steve: 43:43 We are no longer considered, from the IT side, a threat or or an impedance to what they’re wanting to do because and it goes back to what you just said, Max. It’s not fun to tag everything, to manage the inventory, to think about where workload should go, to manage not only the complexities of knowing all the different technology pieces that go into it, but the relationships between them. And, ultimately, when you get down to it, think about every single supplier that you use, different contracts. You have to negotiate all of them. It really has become such a burden that I think most people are willing to ditch that.
Steve: 44:16 I think it’s important because the shift, I think, for IT, in a very positive way has moved from you know, a cost center that we need to go figure out how do we extract every penny we can and so focused on, you know, chargeback, showback, man managing all of those things just to just to, you know, drive the outcome that they’re looking for. I think most people have realized that you have to get your IT, you know, your developers, your engineers focused on enabling the business to go drive revenue, to innovate faster, to actually set themselves up to to adopt whatever technology more quickly. And so in that sense, I think we’re we’re viewed more as a partner to the IT organization than we ever have been. And it’s because we make their lives easier so they can go focus on supporting the business the way they need to.
Max: 45:00 Well, I mean, shadow IT I mean, nowadays, every application is this, like, of shadow IT concept. I mean, Slack started out by just install it, and then all of a sudden you turn around. You have to do ediscovery. And, like, what’s the Slack thing that’s running for x 100 people? Like, whoops.
Max: 45:13 I mean, we’re also seeing this in a different way, which is companies that were, let’s call it, cloud native and, you know, crossed the line and understood that they could go and acquire data center space and and have an economic reality very different from their cloud. Because I mean, let’s face it. Every cloud application has something that’s running in it all of the time. There’s a certain degree of elasticity within a cloud environment, but there there’s a significant portion of that cloud environment that never changes. And those static workloads are, you know, the the prime examples of things that may be necessarily shouldn’t be running in a cloud environment that should be running in some sort of privatized infrastructure because that’s where you’re gonna get the maximum value out of it.
Max: 45:51 So this this epiphany happens. They come off-site. They they establish a data center relationship. They start putting servers, and they start buying servers. And then they get down the path and they realize, wait, I’ve I’ve got 500 servers co located somewhere.
Max: 46:04 Then now I have to manage warranty items on. We have motherboards that are frying out and and and and hard drives that have to be changed. And now we’ve got
Steve: 46:11 a little bit. Right? Yeah.
Tyler: 46:12 Uh-huh.
Max: 46:12 And and you get into this, like, idea of and then it it changes. Right? So now you’re looking at IT as a as a logistics entity. Right? Are you managing inventory and churning inventory properly?
Max: 46:22 And how do you manage logistics, especially when this data center is, you know, 2,000 miles away from where your actual business is based? And how do you support that? And and this is something else that maybe isn’t really, I I would say, the the common thought process, but this is what Rackspace does. I mean, you guys manage logistics at scale globally for companies very effectively and just happens to be in this the format of of servers and network equipment. And so but that’s not a typical IT conversation.
Max: 46:50 You don’t you don’t talk to an IT department about, hey. We’re gonna manage your logistics for you. You talk about, you know, different things. And and this is something that we should, you know, we we we should talk about a little bit because this is a big thing. I mean, supporting a data center at scale is a very nuanced specific animal.
Steve: 47:06 It really is. Yeah. When you think about scale, when you think about, you know, how how much redundancy, when you think about all the certifications that go into it, when you think about this massive global supply chain, keeping it fully standardized, driving to your point earlier, ITIL standards globally, which is not I mean, if you’re not used to to leveraging ITIL, it could be a big lift. But, you know, the Rackspace platform, if you wanna think about it this way, we we’ve actually spent 2 decades perfecting it, and and we’ve layered in a lot of software and automation that allows us to actually do it, you know, not only at global scale, but highly efficiently. So much so that we can even manage in our customers’ own data centers now as well, which has been an interesting deployment model.
Steve: 47:48 And, Max, I know we’ve worked with a with a few customers on that that exact model, and the reality is we can even, you know, extend that same experience in in all of our massive logistical expertise to your point, you know, really anywhere they wanna go. And, Tyler, I don’t know if you had had any other thoughts on that. I know you’re you’re working across all three of our key customer segments. But even even though you’re supporting the Americas business, you you’re still managing global deployment for your customers and seeing the same results. Right?
Tyler: 48:14 Right? Yeah. Not only seeing the same results, but, you know, seeing seeing the efficiency that we drive for customers. I think so often customers forget about, Max, to your point, all of the things that you brought up from warranty items to motherboards or hard drives, managing inventory to, end of life, devices, etcetera. Right?
Tyler: 48:30 And that’s that’s areas where, we definitely can help and we can help, you know, globally. And, you know, one of the the most unique things that that I love about Rackspace is just the methodology in which we deploy, not only servers in a rack, but data centers themselves. And, know, the the most unique thing is, you know, I could pick up a data center technician from, you know, our DFW facility and drop them off in in Hong Kong, and everything runs identical. Everything’s color coded the same. The carts go in the same spot.
Tyler: 48:57 Trash cans are in the same area. I mean, every little thing that you think of, you know, there’s there’s little areas taped off where certain things go. Screwdrivers are color coded. Power cords are color coded different colors. So it’s extremely unique.
Tyler: 49:09 And then the fact that we run it consistently across the board with such rigor is really a sight to see, and it’s it’s something that I think provides a lot of value to customers. Kind of it it really is the foundation, right, of of what we provide. And so it’s a, it’s been unique to watch us deploy globally as we’ve we’ve scaled and grown. But to see that methodology in the DNA of our data center and our employees in data centers has been, really amazing to watch over the years.
Max: 49:34 Now Rackspace does something for global customers that I think is awesome and is not talked about a lot. So let’s I wanna talk about this. So we have a in the US, we end up with a very US centric view of the world. Mhmm. Then then technology, and Internet, and data center, and cloud, and all these things become very US centric.
Max: 49:52 But if you are not in the US, forget, like, language barriers for a second. If you just talk about the actual practical, legal, and financial impact of being a non US company doing business with US companies Right. That introduces some things. Even if you’re if you take away currency exchanges and everything else, and and and you have to go through VAT. VAT becomes a big issue for a non US company and how they actually manage their infrastructure and how they manage, you know, these environments.
Max: 50:21 And Rackspace has global operations. I mean, you have places of business outside of the US. It’s it’s also unique in the world where not very many people have gotten to the size and scale that Rackspace is where you can offer these things. And this makes a big difference for customers, and this changes your engagement story somewhat. And so let let’s take the, like, language out of it.
Max: 50:44 Let’s talk about the other side, the business aspects of it. I mean, you break this down for me because this becomes a a big piece of this puzzle that a lot of people miss and gloss over.
Steve: 50:54 Yeah. It’s it’s certainly, you know, I I think even if it’s understood at a high level, you know, the nuances and details that go into it certainly do matter because it is I mean, just thinking about how you described it. Right? Very complicated, just those those items individually. And then when you put it together, I mean, it just multiplies.
Steve: 51:10 But, you know, we are, 1, 247, 365. Right? That’s, I think, pretty pretty commonly known out there. We do follow the sunset in terms of how we think about shift coverage, handoffs, how we manage these dedicated or named support pods that customers interact with, which is really important. So I’ll give you an example.
Steve: 51:31 We actually have a really large, customer of ours. They’re they’re deployed everywhere in the world, and actually truly multi cloud. So they use private, they use 2 different public providers, and they still have their own bare metal that’s still transitioning. They are using Rackspace for the vast majority of that, but they’re based out of Atlanta, supported primarily by my team for normal business hours. But then there’s this very special thing that happens where we make sure that there’s overlap on the handoff.
Steve: 52:01 We make sure any ongoing tickets that are being worked have a good parallel structure to make this seamless from the customer’s perspective. Now, even though they’re based out of Atlanta and most of their operations are here in the US, they do have a UK team just like we do. They have teams based out of Hong Kong, Australia, and that’s that’s why we were such a good fit for them is we had a a nice localized presence for all of the major hubs that they care about. So in the UK, they’re serviced by the UK team and anywhere in their Asia Pacific region. It’s primarily, Hong Kong and Australia depending on on location.
Steve: 52:34 And, obviously, you know, things like currency, things like language, you know, actually having one consistent experience, making sure that we’re mapping all of those in a very standardized, cohesive fashion actually really does make a big difference with this customer. And they know who to go to for what. They know how we’re gonna service them. They know that it’s gonna be the same playbook run globally. And we actually start by creating that runbook together with our customers.
Steve: 52:58 It changes and and customizes over time, but, you know, that’s just one example. They have the same global experience 247365. We follow the sun. But the best part is we can actually tailor that that localized experience because guess what? People in the UK may wanna work with somebody right then and there same time zone, you know, when we’re out of this post COVID world, be able to walk into the office together, etcetera.
Steve: 53:21 And, things like data sovereignty, etcetera also make a big difference. Right? So our, you know, customers that have have a, footprint in Germany wanna have make sure they’re out of our Frankfurt data center working with, you know, the team that’s there locally is is one example. Right? So just a couple ways to think about it, but there’s so much more that goes into it even beyond that.
Steve: 53:39 Right?
Max: 53:39 I mean, David data sovereignty in in itself. Right? You know, we have we could probably spend hours talking about it. I mean, this is not a small issue for companies. Right?
Max: 53:48 I mean, this is significant, and this isn’t even a compliance heavy companies. I mean, if you’re you know, we’re not talking about people that are in health care that have a compliance mandate that goes on top of their financial services. This is just now the the reality of the world. If, you know, where is your data sitting? What jurisdiction is that data sitting in?
Max: 54:03 Do you have customers interacting with your data? Where do those customers sit in? And what are the roles that come on top of it? And if you’re not ready to deal with that, you’re gonna spend a lot of time trying to learn how to deal with those sorts of things. And sometimes going to a partner who is already dealing with this thing at scale globally can just you know, you can you can get a big shortcut out of it.
Max: 54:20 You know? We don’t need to figure this thing out. We can just go to somebody who’s already solved this problem for us.
Steve: 54:25 Yeah. And that’s well, 1, we’re we’re seeing a lot of, and and it’s it’s intuitive, I think, to a certain degree, but we’re seeing a lot of surveys and and market analysis that’s suggesting that data sovereignty, data privacy, all of these issues are gonna continue to be important, but probably accelerate quite a bit on the heels of COVID and how people will want to localize and, you know, kinda rally, if you if you will, in in whatever scenario that might be. So we’re expecting that to become more important. It’s also one of the major barriers actually when we’re working with customers on why a single cloud provider may not be the right option. They may not have that particular footprint to help with from a data sovereignty standpoint or in some cases, if it is a highly regulated industry, just may not be even though even though some of the compliance measures or ways to keep workloads secure are there.
Steve: 55:14 It may just not be perceived well by their end customers, by the board, whatever the case may be. Right? So I think there’s certainly a bit of a perception issue as well. Anyways, we’re keeping a close eye on those trends, and that’s why, you know, for me, it’s exciting that we have the options we do for our customers because we can solve for any of those in a number of different ways. But, you know, if we were single threaded on any particular technology partner on our side, then, you know, we would be bound by by their constraints as as would our customers.
Steve: 55:39 And so, that’s, you know, that’s that’s something that we’re we’re extremely mindful of, I guess, I would say.
Max: 55:44 And and the other thing that I I still love about you guys is your ability to take on small customers, you know, and still support at the very, very small size, you know, a few servers.
Steve: 55:56 Right.
Max: 55:57 I mean, you’re you’re still operationalized and support, and this is not something where it’s it’s it’s an afterthought. I mean, the very small start up size companies are still a fit for you. And on the other side of it, global companies are still a good fit for you. And that’s also a very difficult thing to do and to and to really and and this goes a lot to your heritage and, you know, your time and market. You know, spending 20 plus years developing these sorts of things, you know, you’ve you’ve definitely gone through some pain cycles in order to get to where you are today.
Steve: 56:27 Yeah. I would say, you know, for some of the folks early on, maybe maybe brain damage is a better way to put it. You know? Look. We’ve we’ve been operating at a global, scale for a little over a decade.
Steve: 56:39 Our operational excellence teams I mean, you know, our global data center, as an example, is still run by Jim Hawkins who’s been here as long as I have. You know? Keep in mind all the things he’s seen, all the discipline he’s instilled, all of the Wiki pages, the, you know, the guides, the training, you know, the compliance just from, making sure that whether you’re in Hong Kong or whether you’re in DFW, that the cables are done exactly the same way, the same color coding, etc. That level of operational discipline is built into everything we do, and it has given us tremendous scale just from a process and deployment standpoint. The other part that we actually don’t ever talk about very often, Max, is that Rackspace has a ton of software driven, deployment models.
Steve: 57:23 We’re software enabled across almost every single thing that we do, and We’re actually in the process of taking this to market from something that’s actually branded. The Rackspace fabric that we use across everything has been in place for over a decade. I think the latest stat was 64% of all support interactions we have with customers are fully automated. Think about that. The most common tasks that customers may want to do, it could be simple break fix stuff, it could be based on their runbook, this username needs to you know, password needs to be reset.
Steve: 57:56 I mean, there’s tons and tons and tons of stuff that we’ve been able to automate, and it’s literally to to put a a pretty fun stat out there, it’s about 4,000,000 transactions per month that we fully automated for our customers, and that’s based on even higher volume of tickets and calls coming in. So while that it’s really nice that we’ve been able to automate that, what’s most important is that that frees up our experts to then spend time on the most strategic, the most complicated scenarios for our customers. That gives us scale across all segments and we love all customers. Whether you have 2 servers or 200 or 2000 servers, we can manage it all the same because of this automation, because of this software driven approach and and this, you know, high degree of standardization globally.
Max: 58:38 When you tell me those stats, I hear 2 things. I hear time and I hear money. Right? And whenever you’re spending time, you’re spending money.
Steve: 58:45 Sure.
Max: 58:45 And this this this affects your margins, and it also affects your customer’s costs. So the more you automate this automation is not a bad thing. Your automation’s a really good thing. The more you can automate and standardize, the less time you have to spend, the faster the customer gets what they actually want resolved or or changed, and the less it costs. It costs you less money.
Max: 59:03 It costs them less money. This is a good thing for everybody involved.
Steve: 59:06 Agreed. Yeah. Agreed. Yeah. And it’s it’s not to imply that it’s not a good thing.
Steve: 59:10 I just wanna make sure folks know that, there’s 2 parts to it. Right? The automation is great, but it’s, what it allows us to go do. And, frankly, in some cases, customers love that they can just get a single pane of glass portal to manage everything. They have access to the integrated tooling and can just lean on us for advice and guidance.
Steve: 59:26 Right? I mean, there’s all flavors of this that that are are really great for customers.
Max: 59:30 We’ll we’ll have to spend another hour on this later because part of what we talk about when it with with your fabric and with your software systems is, I mean, you do give people the ability to do financial modeling against their cloud spends. I mean, you are tracking these sorts of things. You are I mean, this isn’t just something that you’re doing a project and somebody’s going through bills and creating spreadsheets. I mean, this something you’re exposing to customers in real time.
Steve: 59:48 Mhmm.
Max: 59:48 And they can see what’s going on. And, you know, they can understand what’s happening. And then you have data that goes around it. You can look at these things and figure out trends and identify areas.
Steve: 59:57 And Yep.
Max: 59:58 You know, and and for somebody who hasn’t gone to that level yet or is still trying to decipher an AWS bill by themselves, I mean, you know, it’s a very specific pain point. But, I mean, if you’ve ever tried to understand an AWS bill at at at at size
Tyler: 01:00:14 Yeah.
Max: 01:00:15 It’s not easy. Right? And and you I mean, you have to have something that that can that can slice and dice this thing for you more effectively.
Steve: 01:00:21 Yeah. Look. I mean, exporting a CSV file and trying to create pivot tables and really understand it. If if anyone’s done it, it’s it’s the most fun thing you’ll ever do in your life, I promise you. It’s it’s pure hell.
Steve: 01:00:33 Right? But, look, you can get tools. You can you can find ways to get there. But, it it really is even that is is cumbersome because if you have, you know, one tool, it may not work with every provider. It it may be hard to integrate.
Steve: 01:00:44 We’ve we’ve done quite a bit there. Actually, Max, I think even since you and I I last spoke, I mean, CloudHealth is now fully integrated across every single platform offering we have. We have some really great integration points through our recent ONTICA acquisition that are coming in from a cost optimization standpoint. But even just having an API integrated billing platform so that you could get all of your bills pulled in, synthesized, and then plugged into CloudHealth where you can create your own custom tagging, dashboards, reporting, exports. That alone is pretty amazing, to be honest.
Steve: 01:01:16 And then when you, you know, call somebody like Tyler or I or somebody on our team and say, hey. I actually need your help getting this ready. I have a board presentation next week, and I really wanna show what our cost trend has been over the last few years and what we’re doing to optimize. We could literally turn that around for customers within a day or 2 because it’s all there at our fingertips, and it’s what we do every single day. Right?
Steve: 01:01:35 I mean, it’s it’s there’s so many what if scenarios like that that we could walk through that are are really just I mean, it’s it’s tremendous. 1, how complicated it is, and 2, how sim simplified it can also become.
Tyler: 01:01:46 And the cool part about the, the people aspect of of, what military and I always joke with with long term customers, but I don’t think Rackspace would have survived without the South Texas, just, you know, southern mindset of, you know, we genuinely wanna help people. Right? That’s just how we are. That’s that’s what’s in the DNA of of being a South Texas resident. Obviously, we’ve gone global.
Tyler: 01:02:07 We’ve scaled. But I still feel that, you know, in our interactions with customers, even folks that maybe aren’t in Texas. They’re one of our other offices. But I think that’s part of being a Racker is you wanna help people. And so to Steve’s point, we we have the tools, we have the process, but if we didn’t have the people, it would be a much different experience.
Tyler: 01:02:24 And so I think that’s one of the things that we really truly love about Rackspace is we have the people, and they wanna help you be successful in whatever that is. And so it it really is a unique experience when when you deal with Rackspace.
Max: 01:02:37 Absolutely. Infrastructure is commoditized. People are not. Guys, thank you so much for your time. It’s always a pleasure.
Max: 01:02:44 I we could spend, you know, 10 hours just completely geeking out about Rackspace. I have no doubts about that at all, but we have to leave some for another episode. So I appreciate your time today.
Steve: 01:02:54 Yeah. Thank you. We’re, happy to join any anytime, Max. And if you leave it to Tyler and I especially, we will work out for hours and hours of work. We have this stuff.
Steve: 01:03:02 But, yeah, it’s always worth it. Thank you.
Tyler: 01:03:04 Thanks, Max.
Max: 01:03:07 Thanks for joining the Tech Deep Dive podcast. At Clarkesys, 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. Visitus@clarksys.com to schedule an intro call.
