Standards around the open cloud are still in development, under scrutiny and up for debate.  But the growing pains are hopefully well worth the outcome, as more companies find their way into open cloud initiatives that have picked up steam, namely OpenStack.  This Rackspace project had the lucky validation of NASA as a launch partner, but also marked a complete shift in Rackspace’s business.  Essentially giving up its proprietary platform to the world was a tough sell in many regards, but Rackspace is sticking to its core values on this one, while also shifting its strategy as a cloud service provider.

For Rackspace, it’s always been about customer service.  Providing prompt and sincere help to its clients is a defining feature of Rackspace’s business model, and so far it’s prevailed.  Rackspace has climbed to a top position, trailing only behind Amazon as far as hosted cloud services go.  So turning over a good chunk of its platform for open cloud development standards seemed like a risky move for Rackspace, but the company felt the cloud industry has reached a point of necessity for doing so.

“The cloud is the fastest growing part of our business, as the cloud has demonstrated the most growth – in the shortest amount of time – for Rackspace within the last couple of years.  So the decision we made was to take all this proprietary work we’d done, and give it away for free,” explains Jonathan Bryce, chairman of the Project Policy Board for OpenStack.  “What we were hearing from customers is that enterprise and government sectors like the idea, scale, efficiency and automation of the cloud, but many have regulations that keep them from running a multi-tenant client that’s public.  They’ve been asking for a system that works openly, and within their private system.”

The changing client demands has also resulted in a lot of differentiation around locally concentrated clouds, various industries taking to open cloud methods and in turn developing their own businesses around it.  OpenStack was swift in its ability to attract some high profile partners and contributors, growing to over 60 within its first 12 months of existence.

Remaining loyal to its customers, Rackspace relies heavily on its partner relationships, which has enabled them to scale their services to a large extent.  “When you go up against someone like Amazon, with massive scale and the ability to build out in large chunks, a lot of people realized that the pricing war was something they couldn’t win.  Others began differentiating in other areas, but Rackspace has always been dedicated to customer service, so this was an easy one to incorporate.  What’s difficult is the scale,”  Bryce says.  “Our OpenStack partners have launched some important cloud services, and in addition to owning data centers and hosting centers, they also own an extensive, high performance networks.  They’re sticking to what they do best, and so are we.”

With its business approach decidedly altered, Rackspace has had to quickly update its OpenStack software as part of this massive conversion process.  There have been three major updates pushed through so far, each one maturing OpenStack, and adding new capabilities to the back end.  As OpenStack moves into its second year, the Rackspace developer team meets during its anual summit to discuss goals and needs.  The summit kicked off earlier this week in Santa Clara, CA, drawing in over 400 attendees and keynotes from NASA, eBay and others.