Businesses Need to Move from "Cloud First" to "Cloud Smart"

Rackspace Technology, founded in 1998, specializes in the design, implementation, and management of cloud solutions.

Q: How is Rackspace expanding its presence in the Latin American market?

A: Our journey began in hosting and data center services, which is the origin of our name. A pivotal moment in our evolution was co-creating OpenStack, the first public cloud, with NASA. As hyperscalers like AWS, Microsoft, and Google came to dominate the market, our strategy adapted and we became a premier provider of support and administration services for these public cloud environments. To sharpen our focus in this mature landscape, we restructured the company in January 2023 into two distinct business lines: one for our traditional private cloud offerings and another dedicated entirely to the public cloud ecosystem. 

Our position in the region is strong, with Mexico as our primary market followed by Colombia. We serve clients across 12 countries in the region and concentrate on the enterprise and top commercial segments, as well as on cloud-native companies whose operational complexity rivals that of large established corporations.

Q: What are the main verticals and client profiles you are serving within the Latin American market?

A: We focus on clients based on their level of cloud complexity rather than specific verticals. This complexity is typically found in enterprise and top commercial market companies, as well as in businesses that were born in the cloud. A significant challenge arises for companies when their monthly cloud consumption exceeds a certain threshold, about US$25,000 to US$30,000. Below this level managing the cloud is relatively straightforward, but beyond it they require a specialized partner like us. 

Q: How does Rackspace differentiate itself from the market's "popular" consulting firms? 

A: We occupy a specific niche in the market. Our consulting services and portfolio allow us to compete with major firms, and we have won projects against them. The primary difference is that we do not engage in business process consulting; our focus is strictly on technology. We offer clients seeking cloud expertise a comprehensive portfolio of services that supports them at any stage of their cloud journey across multiple platforms. This is complemented by our global scale as a public company, with a presence in over 40 countries and delivery centers in four different regions.

Q: When considering multicloud migrations, what technical and strategic criteria do you use to determine if a client requires hybrid public private or dedicated clouds?

A: The evaluation process is guided by a methodology, but a primary factor is often the client's own preference. We analyze each of the client's workloads, assessing requirements for security, latency, and ease of migration based on the existing architecture. Based on this we might determine that AWS is best for a transactional workload, Google Cloud is ideal for data analytics, or Azure is optimal for the ERP. However we also guide clients toward establishing a primary cloud. Operating with small workloads scattered across multiple clouds is inefficient and expensive, as it requires dedicated specialized teams for each platform, a cost many do not anticipate.

While container technology allows for the creation of portable workloads that can move between clouds, this approach can prevent clients from realizing the full cost and performance benefits of the cloud. Public cloud providers often increase the exit barrier by encouraging the use of their proprietary native services. The more a client uses a cloud's native components, such as databases and security tools, the more cost-effective their operation becomes. The trade-off is a higher dependency on that provider. We help clients navigate this balance finding the right strategy that aligns with their long-term goals, weighing the benefits of deep platform integration against the flexibility of a more portable architecture.

Q: When managing critical workloads or supply chain applications how does Rackspace ensure operational continuity and optimal performance in the face of any anomaly? 

A: Our service for cloud operations and management, called Modern Operations, represents the third evolution of our managed services portfolio. To ensure continuity, we provide a "Follow the Sun" support team that guarantees a response time of less than 15 minutes for priority one incidents. A key differentiator of Modern Operations is its high level of automation; we automate between 60% and 70% of routine cloud operation and administration tasks using machine learning and AI. This includes fundamental activities like backups and platform upgrades, which are executed automatically for all clients. We also shifted from a traditional pricing model based on a percentage of cloud spend to a fixed-price model with a set package of hours. 

Q: How does Rackspace's platform guarantee security and compliance specifically? 

A: Our security offer is extensive and adaptable to a client's specific needs. We provide both Security Operations Center (SOC) and Extended Detection and Response (XDR) services. This allows us to manage a client's entire security posture from the ground up, enabling them to entrust us completely with monitoring and incident prevention. Alternatively, we can complement a client's existing security team and infrastructure. Our portfolio is designed to be flexible; we can operate and manage security components a client has already purchased or we can deploy our own security stack if they have none. 

Q: What are the priorities of Rackspace's AI division? 

A: About two years ago we established a dedicated AI division and developed the Foundry for AI by Rackspace (FAIR) methodology. FAIR is a comprehensive framework designed to guide clients through their AI journey. It includes reference architectures, security frameworks, and methodologies for conducting workshops, defining projects, and building business cases to determine the value of implementation. The methodology also incorporates crucial guidelines for ethics and sustainability. Our process ranges from assessing a company's readiness for AI to leading the implementation and providing ongoing operational management, which presents unique challenges such as monitoring for hallucinations, managing token usage, and ensuring security.

Q: What are the main regulatory social and technological factors influencing the adoption and expansion of the cloud within the Mexican market? 

A: The primary obstacles to cloud adoption in Mexico have historically been fear and a lack of understanding of the technology. Compared to other Latin American markets, Mexico has lagged in cloud adoption. The pandemic accelerated the move to the cloud for many companies but these migrations were often rushed and not well-planned, leading to unexpectedly high costs. This experience reinforced existing fears and made businesses hesitant to reinvest. However the narrative is shifting from "Cloud First" to "Cloud Smart," with companies now seeking expert guidance to ensure migrations are executed correctly. This is where a multicloud advisor like Rackspace provides significant value. While cloud adoption has been slow, the interest in AI is progressing at the same speed as in other Latin American countries. 

Q: How will Rackspace strengthen its presence and operational capabilities in Latin America? 

A: Between 2023 and 2024 our division achieved double-digit growth. Looking ahead, we have a clear initiative to expand our delivery capabilities in Latin America. We have around 200 "Rackers" in Mexico serving both global and regional clients, and we are planning to increase this capacity to reach more countries. We are also preparing to enter the public sector, a market where we have had a limited focus but see large potential. We believe we can transition from our position as a boutique consultancy to massifying certain solutions, such as our highly competitive operations and administration services, which are in high demand across the market.

Another key growth area is our Elastic Engineering service, which provides on-demand access to a pool of experts. This service is growing faster in Latin America than in any other region worldwide, a direct result of the significant shortage of specialized cloud talent. We believe this trend will continue driving strong demand. Finally, AI will be a major engine for growth. We have achieved a great success rate in this field, with about 60% of our AI proofs of concept in Latin America moving into production.