How’s Rackspace Technology Doing A Year Into CEO Kevin Jones Tenure?

Rackspace CEO Kevin Jones
 RACKSPACE TECHNOLOGY

I had the chance Friday to touch base with Rackspace Technology’s CEO, Kevin Jones, around the first anniversary at the company. We talked about a lot, including the past year, its new services it announced today, and the company rebrand.  It had been a while since I touched base with anybody at Rackspace, and I will admit, after my talk with Kevin, I was impressed with the changes over the past year.

Challenging few years

I think the best place to start is to review some of the history a few years before CEO Kevin Jones arrived. Financially, the company had missed booking revenue commitments 21 straight months. That’s nearly two years of missed commitments. I’m a believer that there’s little credibility without financial credibility, and it must have been a tough time to be at the company. Ownership changed as well, moving from a public to a private one, now owned by Apollo. The company also had two acquisitions,  Datapipe and RelationEdge. Turnover was a big issue at the company. There were some bright spots, but I’d say more challenges.

The past year

Let’s move into the Kevin Jones era. I do many of these “anniversary” pieces, and Jones has accomplished a lot. First off, financially, the company has met or exceeded ten straight months of bookings.  Jones was clear to point out that many initiatives were underway and was in no way trying to take full credit.

Jones focused on its Onica acquisition, a massive player in AWS build outs, and expansion in Asia Pacific and Europe, Middle East, and Africa. While I don’t put much stock in Gartner’s Magic Quadrant, it’s great for marketing to enterprise IT and is in the desired upper-right “Leader” spot, right where Rackspace Technology sits for Worldwide  Public Cloud Infrastructure Professional and Managed Services.  

Jones likes to simplify his turnaround strategy in three steps and I like simple:

  • Secure the best management team
  • Create impactful, transformational programs
  • Create a management system to pull in voices from all around the company. I like to call it a corporate operating system

I was glad to hear Jones didn’t want to toss out the company’s history as “Rackers” and the customer support is legendary.

Rackspace Technology is currently generating $2B in revenue in multicloud offerings spanning security, applications, data, and professional services from more than 125,000 customers in 120 countries. The company lists Wyndham, YETI, Ulta, and McKesson as its clients in the Fortune 500. It’s a new Rackspace.

New name and identity

Like all turnarounds, after companies start showing progress, it needs to assess if its branding and identity reflect what the company wants to be. This is what Jones and the company did. While subtle, the company is shifting from “Rackspace” to “Rackspace Technology. ” Rackspace Technology offers “: full-stack solutions across the entire digital transformation lifecycle, including solution areas focused on cloud optimization, security, cloud-native development, and application modernization.” That’s a mouth full but comprehensive.

Rackspace CEO Kevin Jones sums it up with “Our new name, mission and multicloud solutions better represent the value we bring to market. Our mission is simple. Embrace technology. Empower customers. Deliver the future.”

New services

I wasn’t given a lot of time to absorb the company’s offerings in the way an analyst should, but I will provide a hot take.

The company announced:

  • Cloud Optimization to get an app into the right place based on whether you want to reduce costs, customer experience, or a myriad of variables.
  • Cloud Security which crosses hybrid and multicloud. Security is the toughest thing to get right in multi-cloud.  
  • Cloud Native Enablement using born in the cloud tools and processes.
  • Data Modernization for enterprises to monetize and better leverage their data. This is classic analytics.

All I will say is that these are some of the richest areas in the cloud journey. I’ll have to dig in to see how they compare to offerings from Deloitte, Wipro, Tata, Cognizant and Capgemini.

Wrapping up

It looks like it has been a solid year for Rackspace Technology under CEO Kevin Jones’s leadership. The switch from products to solutions was necessary as the die has already been cast in that space. I believe the next era in enterprise IT is multi-cloud, and given the complexities, enterprises need a lot of help and will need it for at least a decade. I’m not expecting any magic API to show up that will get on-prem, hybrid and public clouds to magically interoperate any time soon. I believe the company can differentiate in the way it approaches alliances and in customer experience, and the “old guards” don’t seem to be headed in that direction.  Good luck to Kevin and the team and I will be watching with interest.