Interview with John Engates, CTO of Rackspace
My first exposure to Rackspace was in 2006, when I was working at a company and we had two rented Rackspace dedicated servers, and an account manager who was fantastic. I remember then meeting Rackspace people at conferences and asking if they knew this guy, Joe Dan Dockrey. They said no. I didn’t realize how big Rackspace was getting–but it certainly has gotten huge. But CTO John Engates has been at Rackspace almost since the beginning. He tells us how the company evolved and where it lies now.
Can you tell us about the foundation of Rackspace, and how you came into being CTO? Clearly, you’ve been there a REALLY long time.
The company is almost eighteen years old. We were founded in 1998. I joined in 2000 when it was still a startup and was growing very quickly at the time because of the demand for Internet infrastructure.
When Rackspace got its start, most people connected their own datacenter to the Internet with a T1 line or they used a colocation server to get their servers to the Internet. Rackspace offered a new model for consuming infrastructure: you’d call up and 24 hours later, you’d have a server online. At the time, it was a Linux server (as that was what was supported initially).
People got excited and increasingly more people became interested in our services. They were building new businesses and new websites. There were ecommerce companies and news websites. Our services made it so easy for people to take advantage of Internet access, getting online quickly. Rackspace owned all the equipment and owned the datacenter. Customers needed not do anything – Rackspace took care of the rest.
When I joined, I was the VP of Operations. I ran a lot of the support and managed the people who built the servers. I didn’t have responsibilities for sales and marketing. Most of the day-to-day operations that are customer facing were under my leadership. However, I was interested in what is new and next, so that’s where the CTO role came in. I gravitated toward the new startups launched within Rackspace, the new business models, product offerings, and capabilities. That happened in 2002 when we started our “Intensive Hosting” business, our high end service offering geared toward the enterprise customer.
How did the whole concept of “Fanatical Support” start?
In the early days, there was an Racker named David Bryce who coined that term because he wanted to send a message to the support team that we weren’t going to do basic support or minimal support. We were going to differentiate our company by delivering “Fanatical Support.”
When you think of how support has been offered traditionally in most consumer or even business scenarios, you have had relatively poor support. Most support is the “cost of doing business” and companies don’t want to offer it if they don’t have to. They send you to a website or portal or knowledge base or outsource support to an offshore call center to minimize the cost. That’s an area where we wanted to differentiate ourselves, and since customers usually required help for their servers, this was a real opportunity for us to change the standard perception of support. That’s also where “managed hosting” came from. We weren’t going to just provide dedicated servers. We were going to build servers and manage them in a fanatical way. That’s part of our culture and we’ve maintained it ever since. It permeates the culture of the company and we celebrate it across the organization.
What do you think contributed to the initial and continued success of Rackspace, given that it is one of the topmost reliable hosting solutions out there?
It comes down to our passion for serving customers, that we are a little more expensive but we are worth it. We’re someone you can trust and rely on. Once you have that reputation, it spreads. When you have great employees, and it’s a great place to work, it becomes a virtuous cycle that leads to more and more customers over time.
Can you tell us about all of your hosting solutions offered to date? Any future plans for others?
Historically, we’ve always targeted customers who needed reliable, scalable Internet infrastructures: servers, network connectivity, storage, and security components, and we wrap managed services around those. We back these services up with a service level agreement (SLA). We’ve evolved from a company that targeted small and medium sized businesses (startups, young companies) and today serve some of the biggest companies in the world: Fortune 100/500 and big companies all over the world.
We are managing some very critical applications: big company websites, large ecommerce websites, and SaaS businesses that need 100% uptime and high security and reliability. They happily pay for that level of service and support and the expertise that comes with it, because their businesses rely and depend on it.
In terms of solutions, it’s as simple as something as small as a dedicated server, cloud server, or a little storage, all the way up to running hundreds or thousands of servers that run a large scale eCommerce or SaaS application or a multiplayer online game. Many of of those types of applications run at Rackspace.
Where are your offices now, and how many employees do you have?
We have 6,000 people.
- San Antonio, TX houses the company headquarters (3,000-4,000 employees)
- Austin, TX office, 90 miles away from San Antonio (800-900 employees)
- Office in London, UK
- Smaller offices in Hong Kong, Sydney, Australia, and Blacksburg, Virginia (email team and cloud office team)
Some of these offices are small (20-30 people) and some have close to 1,000.
Where is your infrastructure based, and is it possible to tell us how many servers you have altogether being managed across these datacenters?
We have datacenters in Dallas, Chicago, Virginia, London, Hong Kong, and Sydney.
We can’t tell you how many servers we have – it’s a lot. We keep growing!
Are you finding that more people are moving to the cloud since you’ve established yourself as one of the top cloud providers, or are there still requests for dedicated servers?
Lots of people are moving to the cloud, but dedicated servers still play a very key role in delivering the infrastructure that the customers need. Sometimes dedicated servers perform better and have better security for certain customer needs.
Sometimes customers use cloud servers and dedicated servers together in a hybrid model to give them the best price and best performance mix. That’s a capability that’s fairly unique to Rackspace. It became an obvious combination for our customers and we started to mix those together, so if you’re in need of dedicated servers you can have those, if you need virtualized servers, you can have that too, or you can have public or private servers based on OpenStack. We’re unique in that you can have all of that together under one roof.
There are some people who go straight to the cloud, but some go to a dedicated server or private cloud if their problems are not addressed by the public cloud.
Can you tell us a bit about the Rackspace partner network?
Rackspace has always had companies that want to resell our services or build capabilities on top of our services to sell to their customers. Sometimes consultants need infrastructure to serve to customers. Therefore, they become partners. They work with Rackspace and together, we jointly serve another customer. They’re a great way for us to get the market. Customers sometimes don’t come directly to us for the infrastructure. Instead, they go through a local reseller or VAR or consultant or supplier. We love that business–that’s how they end up at Rackspace.
Another pro is that it becomes less costly to acquire those customers. Often it’s the reseller or partner that adds value that we don’t have. They bring the solution together and make it easier on the customer to get their product or service launched and their business off the ground. It’s really helped us reach a market that we wouldn’t be able to reach all by ourselves.
What advice would you have for someone who is new to hosting and wanted to use Rackspace?
Give us a call, talk to our employees who are ready to chat (you can use live chat through the website too), and they are very happy to talk about the solution that you need that fits your budget, that fits your technical need, and will solve the problem you’re trying to solve. That’s something we’ll always do based on our foundation of Fanatical Support. We do this to win new business but also because it’s the right thing to do. You can certainly buy and sign up directly on our website, and a lot of customers try us out that way, but as soon as things get complicated, what you really need to do is pick up the phone and talk to someone, because that’s where the real value lies: the expertise and support we can deliver.
If you want the cheapest server out there without any support, that’s not us, but if you need that support and the reliable infrastructure and the people to back it up, that’s what we do best. One of the things we did recently is expand our Fanatical Support beyond just Rackspace’s infrastructure: we partnered with Microsoft Azure and Amazon Web Services, and customers are calling us to manage their infrastructure across these multiple clouds.
Your Twitter handle tells me to ask you about the Rackspace Managed Cloud. Assuming you haven’t told us about it above, can you tell me about that?
We’re helping customers manage their cloud applications wherever they are. That’s the future: multi-cloud. That’s what we believe. People use the term “hybrid cloud,” but people are building applications and deploying them wherever it makes sense at the time, so it’s across a variety of applications and is why we prefer the multi-cloud term. The bigger you get, the harder it is to manage yourself. Sometimes customers want help with that; they don’t want to spend their time on the day to day maintenance of services. They want to focus on innovation, the new stuff for their businesses. If they can focus on that and we take care of the rest, that’s a great foundation to build a business on.
Can you tell us tips on meeting with clients to better understand their needs and to serve them better? I love the approach of going face-to-face to speak with clients.
We mentioned that we interact with customers over the phone. In person, though, is way better. We will travel to see customers. I travel all the time. I love interacting with customers and make sure the sales folks know so that I can connect with people they’ve been talking to. We also invite customers to see us at our headquarters, giving them access to our staff. Onsite at Rackspace, we can bring their Fanatical Support team in, such as our database/storage/security architects to connect directly with their engineers and team members.
Yes, there’s really no substitute for a face to face conversation. It’s nice to see them in their own office to get a sense of who they are, where they are, and more about their employees. As practical as you can when setting this up, make it easy for the customer. Take them to lunch, bring them to your office, or go to theirs.
We also go to conferences. We have a conference called Rackspace Solve, which is essentially taking Rackspace on the road. We’ve hosted these in NY, SF, London, and Hong Kong, all the places we have datacenters. We have also been in Dallas, Atlanta, and Chicago, really wherever our customers are. We get Rackers and customers in the same room and talking to one another about the challenges that they face and the solutions we can deliver.
Were there any takeaways you’ve had from working at an ISP to now being CTO of Rackspace?
This has been my whole career, working in the Internet industry in a technical area in a fast growing field. Do things you’re excited about, things you enjoy, and that you love to talk about. I’ve been talking to people since before people knew what the Internet was, growing up in an environment where you can build the future. People take the Internet for granted now. But some, like me, we’re excited all the way along. It’s my dream job to be part of it, I never have had a boring day in this industry.
How is Rackspace using OpenStack, and why did you choose to make the foray into the open-source cloud?
We were one of the creators of OpenStack with NASA. OpenStack is used to power our public cloud and private cloud. We chose to do it in an open source way because we are consumers of open source software, and because there are big benefits to the open source model. Not only do you get lots of developers and companies collaborating, you make it easier for people to consume the software. With open source, you technically can do it for free, and since there are no licensing costs and constraints, it helps it get spread quickly. For example, the software spread from San Antonio to Beijing in a short period of time, which is a different result you’d expect than if the software were closed source.
The downside: We don’t own OpenStack so we can’t monetize it completely. Still, it’s globally successful, there’s strong community around it, and people want to see it succeed. Open source makes it as successful as it could be and everyone benefits from that success.
Is there anything else you want our readers to know?
Security is very important to us. There are so many hackers trying to steal data, and many companies are struggling, so security is a great complement to the managed services we offer.
Data is another area that customers struggle with: the concept of big data is real, and the tools that have emerged to manage data are complicated and difficult to get started with. Both of these are areas are extensions of our managed services.
We have continued to branch out and deliver on the promise of Fanatical Support. There is a strong internal culture that supports that and leadership that believes in it. It resonates with customers, because everybody wants good support. With Rackspace, they realize that someone cares about their business and applications and is watching out for them.
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