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Summary:

Rackspace, perhaps deviating from its “fanatical support mantra” is cutting prices on its CDN services and rolling out a new tiered price structure for other services

As if to prove Amazon isn’t the only price chopper in cloud, Rackspace on Friday cut prices on a key cloud service and is starting to roll out tiered pricing for other services.

First off, it sliced the cost of its Content Delivery Network (CDN) services by a third from $0.18 to  $0.12 per GB. The new, lower price matches Amazon CloudFront CDN on-demand per-GB pricing for the first 10 TB per month of out-bound data transfer. CloudFront prices drop after that.  Amazon does not publish its reserved pricing for CloudFront. CDNs route traffic around the web to put it closer to prospective users thus reducing latency and page load times.

Secondly, the new tiered price structure will first apply to Cloud Files Object storage with volume discounts ranging from $0.10 per GB per month for up to 1 TB, then falling to $0.075 per month or lower when storage surpasses a petabyte (see chart.)

raxtier

For comparison, AWS S3 storage prices are lower, but, as Rackspace likes to note, Amazon also charges for PUT, POST, LIST, HEAD, GET and DELETE requests and Rackspace does not.

awss3price

This move shows that Rackspace, with its new OpenStack-based cloud services, is bound and determined to compete with the biggest of the big cloud players. In the past the company has seemed reluctant to compete on price alone, instead invoking its “maniacal fanatical support” mantra to justify a premium.”

“Rackspace has always responded to AWS price cuts with statements like ‘but we have great service.’    Looks like the market is demanding the cuts,” said David Linthicum, CTO and founder of consultancy Blue Mountain Labs and a GigaOM PRO analyst.

  1. Best thing about aws is cause everyone to lower prices eventually.

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  2. No compute cuts though – and 80% of all costs are on compute. Rackspace is still vastly more expensive than AWS, Google or Azure for compute services.

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    1. do you think compute cost cuts are coming though?

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      1. J.R. Arredondo Friday, February 22, 2013

        [Disclaimer: I am a Rackspace employee]

        In general, Rackspace focuses not just on the technology (Compute, Bandwidth, OpenStack, etc.) but also on the service. We have Core Cloud and Managed Cloud services that help people focus on their applications, not on managing their infrastructure. We do that for them, and they see value in that. Every piece of an architecture has different levels of value for customers, and the scale also applies to each tier independently. Of course we always want to be competitive, but our customers appreciate and value Rackspace not just as a provider of Open infrastructure but also as an extension of their own teams.

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      2. I am a client of Rackspace. I called their support staff on Friday, 2/23 at about 5:45 p.m. EST with a CRISIS. We had tried to point our existing URL to another URL on Amazon (where we had built another site) and the whole thing got messed up. Lucky for me, I called John Montelongo, my contact, who proceeded to have about 5 or 6 calls with me and when he left at 7 pm est, Kenneth Kirkpatrick jumped on it. It was “dicey” and John and Kenneth did everything to solve not only the original issue but the “fall-out” which was that once this process got going, I was no longer able to get business emails as the hosting provider is Network Solutions. What’s next? They got on the NS site and walked me through the changes that had to be made to get the mail back on track. I can say without reservation that I have NEVER had such patient, competent and calm dedication to “get the job done correctly.” Wow! Fanatical for sure! Kudos to Rackspace:)

        Wow!!!

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  3. J.R. Arredondo Friday, February 22, 2013

    Hi Barb, hey, J.R. here from Rackspace. Just a quick note. Our support is not maniacal! (dictionary definition:”affected with or suggestive of madness”).

    We are Fanatical (dictionary definition: “marked by excessive enthusiasm and often intense uncritical devotion”).

    From our site: “It’s the no excuses, no exceptions, can-do way of thinking that Rackers (our employees) bring to work every day. Your complete satisfaction is our sole ambition. Anything less is unacceptable.”

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    1. om goodness. of course. this mistake says more about me than anything changing!

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      1. J.R. Arredondo Friday, February 22, 2013

        Thanks! I did not mean to give you work. Just trying to clarify.

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  4. well, It is a nice post but i do not think that Amazon gives the things on low prices, they are having a lot profit on their sales.
    thanks

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    1. that is the eternal question re. AWS, James– how much do they make on cloud services? Two schools of thought — it’s tiny tiny margin and the other is it’s quite profitable. I would bet on the latter myself but they don’t make it easy to tell

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  5. It’s not profitable. But it is a clear way to squeeze competitors out of market to gain majority share that you can later captively upsell to.

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  6. Such a misconception, price got nothing to do with it. How about adding convenience to the package. remember people don’t buy just because its cheap. they got to see real value in it. you are welcome to try our PLAN feature to access how you can build a blue print for your deployments before spending a dime. compare , collaborate & decide what makes best sense to your requirement. glad to host you at http://www.attribo.com

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  7. It’s important to note a key difference between the Amazon and Rackspace CDNs: Amazon’s run out of their facilities/points of presence but Rackspace resell on top of Akamai.

    For the Server Density website/web app assets, we used to use Amazon but they have too few edge locations so many of our customers were seeing high load times. Switching to Rackspace meant we could taker advantage of the Akamai network which has thousands, usually located significantly closer to the end user. This is a major advantage – the Amazon edge locations are optimised for their own consumer retail sites (which makes sense for them) but Akamai is optimised to be as close to as many web users as possible.

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    1. >Switching to Rackspace meant we could taker advantage of the Akamai network which has thousands, usually located significantly closer to the end user.
      No. Rackspace uses 213 of Akamai’s edge locations…customers’ typical usage patterns, and designed to cover all major areas of the globe…. source: http://www.rackspace.com/cloud/files/

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  8. Where does it say 213? Akamai has over 90k around earth.

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