There’s nothing like having your opinion validated and this week I read that comments I made in an article last month in the Rust Report about the travails of IaaS Cloud provider, Rackspace, have been totally echoed in non other than…Forbes Magazine!
In the Rust Report article I talked about how Rackspace simply could not expect to compete in a world dominated by players such as Microsoft, Oracle and Google who command vast amounts of capital, benefit from huge customer bases and demonstrate equal amounts of ruthlessness. I drew analogies with the airline industry where ultimately as the service became increasingly commoditised the result was brutal market consolidation.
Then this week I found my view was reflected by Forbes’ Mike Kavis, who writes today:
“This is why I chuckle when new comers to the IaaS game unleash their PR machines to declare they are throwing their hat in the ring and investing $1B to enter the market. Their competition is investing more than that every quarter.”
So as Rackspace exits IaaS and will now focus its efforts on Managed Services, I wonder even how that will go. Managed Services is itself a crowded market, equally dominated by big players like IBM, HP, EDS etc. Their corporate story is more proof yet that unless you continue to innovate your offering, the market will eat you for lunch. A radical pioneer only a few years ago, it seems Rackspace is today perhaps running out of room to move?
[Picture Credit: Forbes]
One of the more exciting ventures I’ve ever been involved in in my career has been participating in the evolution of a business called Rock Solid. Working closely with its founder, Tony Bain, together we have been able to fundamentally disrupt the business of SQL Server Database management. No matter what space you are able to disrupt, it is always exhilarating and exciting – I can highly recommend it!
Rock Solid’s story was covered this week here in The Rust Report.
Tony has been able to innovate a tool to manage and monitor SQL Server databases that can slash the cost of their management – up to 60 per cent of traditional costs – for clients. Now, as that message has begun to get across, the growth of that business is exponential.
This has brought its own challenges for us of course, but ones that we welcome. Managing huge demand and scaling a business to meet that rapid demand are good problems to have! The next challenge for the team is to capitalise on this exciting opportunity now, international expansion, more growth, innovative partnership and so on. But the experience has also proved for me that the incubator model is powerful – as Tony himself explains well:
“[Red Rock] shared the vision and understood what our objective has always been…they have allowed us to heavily invest in our technology, putting us at a considerable advantage in terms of our capability to rapidly grow the business.”
Start Ups need capital of course, but they also need direction, advice, resources and so on. This venture has helped me realise that the incubation sector in Australia should be expanded and this is maybe something Government should help more with?