Rackspace partners with HPE to introduce pay-as-you-go private cloud

By applying a public cloud payment model to dedicated infrastructure, Rackspace says it could bring a whole new range of enterprise workloads to private cloud.

Changing definitions of private cloud

Rackspace is partnering with HPE on a new way of delivering private cloud managed services -- they're applying the pay-as-you-go model of the public cloud to a single-tenant private cloud environment.

The pay-as-you-go OpenStack private cloud, delivered as a managed service, will be generally available on or off-premise on November 28. It will be sold by Rackspace and HPE and delivered in partnership between the two companies.

The offering is targeted at large enterprises looking to handle bursting workloads, Rackspace's Scott Crenshaw, EVP of private cloud, explained to ZDNet.

"When we go to an enterprise customer, they know what their baseline requirements are for capacity," he explained. "So we put in infrastructure that is available to handle that baseline and then we add to it a large set of dark capacity... It's there, it's available, but they don't pay for it until it's turned on."

The offering merges HPE's expertise in hardware, servers, storage and the surrounding financing, Crenshaw said, with Rackspace's experience in private cloud management. That combination, he said, makes the aggregated cost of this new pay-as-you-go private cloud offering less expensive than public cloud.

The cost of the new service will vary dramatically based on the requirements of the customer, Crenshaw said. However, after comparing the costs of their new service to Amazon Web Services' public cloud costs, Rackspace says its price points are typically 40 percent less per gigabyte hour or per VM hour than the three-year reserved prices offered by AWS.

The new offering, Crenshaw said, "shifts the cost-benefit analysis [of private cloud] to a whole new range of workloads."

"Certainly for bursting workloads, it's always been cheaper to rent a few VM hours," he said. "We're changing that."

There's already a healthy demand for private cloud, Crenshaw said, pointing to an OpenStack user survey, which took a snapshot of deployments logged between Jan. 26 and March 1 and found a 44 percent year-over-year increase in deployments.

Early on, enterprises would migrate to the cloud in a relatively ad hoc manner. Yet in the past year or so, Crenshaw said, enterprises have started making more calculated deployment decisions based on their application portfolios. They're often choosing private cloud deployments, he said, because of the relative ease of migration and the economics. The rule of thumb up until now, he said, has been that private cloud is the economical option if your portfolio of applications uses at least half of your server resources.

There really aren't enterprises turning exclusively to private cloud, Crenshaw said -- "It'll be a multi-cloud world." That said, he added, "I wouldn't be surprised if private cloud ends up the destination for the majority of enterprise applications."

While Rackspace is starting with OpenStack, next year the company expects to offer its pay-as-you-go private cloud service on VMware and Microsoft Azure Stack.

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