Mark Morgan, President of Intelisys, meets with Michael Stephens, Global Channel Chief at Rackspace, to discuss the multi-cloud world and opportunities to evolve alongside technology in the remote landscape.
Mark: Good afternoon, everyone. I’m Mark Morgan with Intelisys. And today we have a very special guest in our Remote Workforce Spotlight, Michael Stephens, Global Channel Chief with Rackspace. Michael, how are you?
Michael: I’m doing great today. Thanks for having me, Mark. Appreciate it.
Mark: Yeah, this conversation has been a long time coming. We’ve played a little bit of tag for quite a while, and I think the timing of that and the delay in us getting together is–I think the timing is great because there’s a lot going on at Rackspace. You guys recently rebranded. And today you’ve got some really big news. So tell us about that.
Michael: Thank you. It is fantastic to be here and it is truly a special day for Rackspace Technology. As you mentioned, a month ago or so, we had rebranded from Rackspace to Rackspace Technology. And with a brand of just Rackspace, quite frankly, what we heard a lot of is people thought we were either a shoe company or we were a colocation company.
And frankly, Rackspace Technology better represents who we are and what that looks like to us as Rackers… we refer to ourselves as Rackers … we view ourselves as valued members on a winning team on an inspiring mission. And with Rackspace Technology, that mission quite frankly now, is to embrace technology, empower customers, and deliver on the future. Today we’re able to do that and take a huge step forward as a company. I’m pleased to announce that as of this morning, we became a publicly traded company on the NASDAQ under RXT.
Mark: Congratulations.
Michael: Thank you. We as Rackers are very happy about that and pleased about the future potential of Rackspace Technology.
Mark: Well, that’s fantastic. Congratulations to everyone on your team and in the company. That’s great news in this time. As everyone obviously knows, I think we’re running on, what is it? Month six? Month five? Month six? I don’t know. It feels like two years of the situation around COVID. And I think a good question to ask is, how has it impacted you guys and where have you found opportunities in the channel? What’s it look like for you?
Michael: Great question. So early on in the pandemic, quite frankly… and one of our core values as a company at Rackspace Technology is compassion. And so early on we actually invested $10 million of open stack hosting resources and we put those resources at no cost to companies that were really trying to be on the front lines of helping relief efforts of the pandemic.
The second thing that we did right out of the gate was in our MSP and VAR practices that are part of our productivity and Microsoft suite, we extended Microsoft teams to our Office 365 users for free for six months. That really speaks to kind of the compassion core value that we have as a company. Since then, I’ll just call out on one that we really have been focusing on as a company, and that’s cost optimization.
Before the pandemic, cost was obviously an important component to any successful business, but as we’ve migrated into this pandemic environment, it’s taken a lot of companies to look at their balance sheet and figure out where are there cost opportunities. One of those spots has really been in a multi-cloud world, right? That’s the world we live in and companies more than ever are interested in what strategies can they deploy to really reduce their cost in that space. And it is one of the cornerstones of Rackspace. Through our professional services and managed services, we are really in a great spot to help customers understand, optimize, and manage that multi-cloud experience for themselves.
Mark: That’s a great point because our partner community, we’ve had a number of partners that have seen tremendous opportunities. They closed early on and then they’re unfolding all around cost optimization, spend management, et cetera. I think that’s one of the areas that is going to present opportunity for you guys and for the channel over the next 18 to 24 months or longer.
Another question that I wrote down this morning is, can you give us an example of how you guys are helping existing partners or gaining new customers? You got good stories there?
Michael: Yeah. Well a fantastic use case and again, very centered in these times of a pandemic. If you think about the trials and tribulations of the retail world, and what we’ve seen is that customers either hadn’t really invested in an online experience or all of a sudden, maybe they’d invested in it, but it wasn’t a core business practice or a go-to-market approach for them. All of a sudden it might be the only way that they can keep afloat through that platform.
And so we are here from an infrastructure as well as an application perspective to help customers on that front. Whether the customer is using Magento, Sitecore, Adobe, Oracle, SAP, we can come in and really help design it or optimize those applications. We don’t really care what infrastructure it’s on. It could be sitting in the public cloud. It could be sitting in a private environment. And what we bring to the table is our expertise, our comprehensive SLA, and our toolset. And we can really come in and help them get… really from an innovation perspective, in terms of business outcomes, innovation is so huge. And that’s an example in the retail space where we support those customer needs.
Mark: As you look at your business, I’m certain there’s areas that are providing the biggest growth. What can you share with our partners and with the channel around opportunities for growth that they can play off of, where there is a vertical market as you’re… you know, for example, in retail. What are you seeing? Is it private cloud? Is it application services? Is it all of the above?
Michael: The easy answer is it’s all of the above, but let me use a couple of examples from a business outcome perspective of where we’re seeing growth opportunities and then kind of the solutions side of it. First is that cost optimization, and furthermore drilling down into our solutions. The average customer has somewhere between five and eight different clouds. That’s why we call the world a multi-cloud world.
So we’re able to come in and through our professional services, managed services practice, we can help advise, design, build, manage, optimize those clouds. We potentially can bring them, oftentimes, into a private cloud solution that has a security wrapper, that has optimization in terms of performance, and it really meets the cost drivers that the customer is looking for. So we’re in a great spot to really help cost optimization. That’s an area of a business outcome that’s grown for us.
The second one is in terms of second business outcome, customers that are trying to grow their business. One of the ways that customers can grow their business is improve their customer experience. Well, how do they do that? One way is through examples, is through CRM, and through applications. So another growth solution area for Rackspace is we can come in and manage those leading applications, whether it’s SAP, Oracle, Salesforce, and what’s unique about that situation is we don’t necessarily have to own the infrastructure either. We could come in and just manage the application.
And the last is innovate. So customers, in terms of business outcomes, want to create an environment where they can innovate. One of those areas is, “How do I make my product development go faster?” And so Rackspace is right there being able to consult and operationalize a product developed production environment, development environment, test environment, so that customers can release products faster and really increase their business agility. So through professional services, applications, and private cloud, those are three big solution areas for us that we see growth.
Mark: What do you see as one of the biggest differentiators for Rackspace Technologies? How do you set yourselves apart from all the other guys out there?
Michael: Our number one differentiator Mark, and I always love this question, it’s the Racker. We have about just shy of 7,000 employees and about half of them are engineers. So when you think about expertise, we don’t necessarily have products. We’re a managed services, professional services company so we bring our expertise to the table. 1,700 AWS certifications in a leading AWS MSP, 1,200 Microsoft certifications, five-time Microsoft Hosting Partner of the Year. 230 VMware certifications, 2020 Global Partner of the Year. So that list continues to go on, but our differentiator at Rackspace is our expertise.
Mark: Yeah. That’s pretty incredible. That’s a lot of work on your team’s part. So yeah, that’s one of the things that our partners like about you guys, is the level of confidence they have in your team’s ability to go help them inside of their partner’s business. I’ve got one last question and I think this is a really important question and it’s basically how do you see the future for technology and how Rackspace is innovating with customers to meet the demands of whatever this next environment’s going to be when we … the buzz word is, “what’s the next normal, not the new normal?” It’s changing so quickly.
Michael: The future of technology for us is really the marrying of solutions, technology and our expertise and where we see that right now, and what’s on the leading edge. And that’s why I love our partner community. By the way, Mark. ScanSource and Intelisys’ community, these are partners and sellers that are really not just leaning into this space. They are stepping into this space, so we’re holding education sessions in leading edge, what we call cloud native practices. So sure, there’s a lot of buzz words out there about machine learning and AI and IoT and we see that as the future of technology. But the thing that Rackspace brings to the table is, those leading-edge technologies have to operate in a multi-cloud world. And we are the experts to enable and help our customers achieve their business objectives through our multi-cloud expertise. So as those kind of buzzwords continue to evolve, we’re going to be right there with our customers continuing to provide a fanatical experience.
Mark: Well, that’s awesome. We’re about to run out of time and can you share one of your most favorite experiences in these back-to-back video conferences that you grab? What is one of the oddest or one of the funniest things that you’ve seen along the way?
Michael: Well, I’ll tell you, I have a 16-year-old daughter who, love her to death, she comes in in the morning before she goes off and babysits a family’s children. And she has recently really enjoyed putting perfume on and she will come in and give me a big hug in the morning before she leaves and pretty much all day, I smell like her perfume on conference call after conference call after conference call. It’s not that anybody else gets to enjoy that, just me.
Mark: Well, that’s great. One of my favorite things is it’s been great to be able to meet a lot of people virtually and specifically meet family members and pets and just see the normalcy of life and what we’re all going through. So that’s awesome. I really appreciate you taking time out of your day and I look forward to seeing you face to face sometime in the near future.
Michael: Indeed. Thank you for your time. Appreciate it.
Mark: Well, thank you, Michael. Have a great day.
Michael: Bye guys.
