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]