Blog Post

Structure 2010: Rackspace Exec on Bringing New Apps vs. Legacy Into the Cloud

Cloud-based services represent just a thin slice of Rackspace’s revenue today, but the segment is growing quickly compared to the rest of the pie. Speaking onstage in a fireside chat with Om at the GigaOM Network’s Structure conference this morning, Lew Moorman, president and chief strategy officer for Rackspace, said about 10-12 percent of the company’s revenue is currently cloud-based and increasing at a “much higher rate” than its managed hosting business.

For Moorman, the big opportunity is in providing services for a wave of new applications. “The number of apps that are going to be built so outweighs what already exists,” he said. It will be a rare company that says, “Lock, stock and barrel, let’s take legacy into the cloud,” said Moorman, although he expects that shift to take place over the next decade.

Most companies will take the stance that since current systems work for legacy applications, “Don’t touch it,” according to Moorman. On the other hand, “If you’re going to build something,” he sees companies increasingly saying, “Let’s do it in the cloud.”

For entrepreneurs looking to break into the cloud space, Moorman thinks there’s unmet demand for guidance in making the switch — something that several of our LaunchPad startups hope to address. “Companies are trying to figure out: How do I move to the cloud?” said Moorman, adding that “private cloud” strikes him as code for “make your inefficient operations more efficient.”

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