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Why Growing Cloud Commoditisation Still Won’t Rain On The Data Centre’s Parade

13 November, 2014

Why Growing Cloud Commoditisation Still Won’t Rain On The Data Centre’s Parade

Rackspace’s recent decision to discontinue its pure infrastructure as a service (IaaS) offering in favour of “managed cloud” services is further evidence that it is the cloud rather than the data centre providers most at risk of becoming commodities – as I originally predicated here back in May.

Take Rackspace’s exit from IaaS as a sign of things to come. Many more Cloud services are already well on the way to being commoditised and their providers will see their margins increasingly competed away.

During the past couple of years Rackspace has been attempting to compete with low-price competitors such as Amazon Web Services, Microsoft with its Azure Service and Google in the IaaS market. But now they are going back to their roots as a managed provider rather than attempting to be a carbon copy of Amazon. That’s how they made it in the early days. The business model of a managed cloud provider is much different to the approach taken by AWS and Google which offer pay-as-you-go IaaS on-demand services.

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