ENTERPRISE:

“Journey to the Cloud”

2

Cloud Expo June 2012

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• Trademarks and Service Marks

• Rackspace® and Fanatical Support® are service marks of Rackspace US, Inc. registered in the United States and other

countries. OpenStack and OpenStack design are trademarks of OpenStack, LLC. Other trademarks and trade names

appearing in this presentation are the property of their respective holders. We do not intend our use or display of other

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these other companies.

3,000 employees, or Rackers

100,000+ customers and growing

Listed NYSE 2008 (RAX)

2009 Hosting Revenue

Anand Bhadouria

IT Veteran – 20 years

WHY

RACKSPACE

IS THE

SERVICE

LEADER

5

A Simple Vision…

To be recognized as one of the

world’s great service companies.

“ ”

Fanatical Support® makes us the most trusted

partner for business.

Open Technologies at Web Scale ensures value and

reliability.

Seamless Portfolio of hosting and cloud computing

services.

Our Customer-

Centric Strategy

RACKSPACE® HOSTING | WWW.RACKSPACE.COM

RACKSPACE® HOSTING

8

180,000+ CUSTOMERS

82,000+ SERVERS 20,000+ VMs

≅60 PB STORED

4,300+ RACKERS

8 WORLDWIDE DATA CENTERS

GLOBAL FOOTPRINT 120 + COUNTRIES

60% FORTUNE® 100

OF THE

WE SERVE

Annualized Revenue

OVER $1

BILLION $$$$

PORTFOLIO OF HOSTED SOLUTIONS

Dedicated - Cloud - Hybrid

A LEADER Gartner Magic Quadrant for Managed Hosting

“We consider our

leadership position in Gartner’s Magic Quadrant for Managed Hosting providers as further confirmation that Fanatical Support® provides great IT outcomes for our customers.”

Lanham Napier, CEO, Rackspace

INTRODUCING OPENSTACK

An open source cloud computing program that will meet the needs of public and private cloud providers by being simple and massively scalable.

A bigger, more robust ecosystem for more tools, better

capabilities and a stronger platform

Flexibility in deployment of a highly elastic commodity

cloud

Freedom to decide how you want your cloud

Greater industry standards

Increased speed

No fear of lock-in

CLOUD

STRATEGY

What is the

CLOUD?

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Cloud Computing: definition #1

NOT IN MY DATACENTER!

NIST Definition - Definition #2

5

Characteristic of Cloud

On-demand self-service

Broad network access

Resource pooling

Rapid elasticity

Measured service

4

Deployment Models

Private cloud

Community cloud

Public cloud

Hybrid cloud

3

Service Models

Software as a Service (SaaS)

Platform as a Service (PaaS)

Infrastructure as a Service (IaaS)

Understanding the Stack

Server

Monitoring

Network

Storage “Other”

Database • Computing infrastructure as an

outsourced service

• Flexibility for the developer; requires effort to deploy apps

• Fit for custom and legacy apps

• Low lock-in risk for the app

IaaS Infrastructure as a Service

.Net Framework

PHP Framework

Python Framework

Ruby Framework

“Other” Framework …

PaaS Platform as a

Service

SaaS Software as a

Service

• Development platform with underlying infrastructure

• Simplicity for the developer, but 100% prescriptive

• Fit for small apps, but potential to outgrow

• Lock-in risk for application

• Software on demand

• No developers

• Fit for standard business applications

• Lock-in risk for the business

Sales/ CRM

Mail

Financial HR

“Other” IT Mgmt

“Utility Billing” (pay as you use)

“Unlimited” processing and storage

Elasticity to scale up or down

On demand, self-service

Highly automated

Maximize revenue

Reduce cost

Expedite time to market

Focus resources

Do more projects

Dynamically scalable,

virtualized resources

provided as a service

IBM: Nearly Two-Thirds Of

Global CIOs Ready For Cloud

In its 2011 CIO study, IBM found

that 60 percent of 3,000 global

CIOs will embrace the cloud by

2016. Meanwhile, in IBM's 2009

CIO study, only a third of global

CIOs said they planned to pursue

cloud computing as a competitive

advantage. ***

*Gartner, Hybrid IT: How Internal and External Cloud Services Are Transforming IT - Feb 8, 2012

**Gartner Top 5 Trends for Private Cloud Computing - Feb 14, 2012 *** CRN, May 2011

“This is the year [2012] private

cloud moves from market hype to

many pilot and mainstream

deployments”**

“Cloud computing is real: It

has moved from buzz to

business, and has changed

the nature of IT…workloads

will move around in hybrid

internal/ external IT

environments.”*

IT Spend in the Enterprise

• ‘DEAD MONEY’ = “keeping the lights on” – Not directly contributing to your business growth or enhancing your competitive advantage

• 7-8 out of 10 Enterprise IT dollars spent is ‘dead money’

• ~80% Keeping Lights On

• < 20% Invested to change the business

• Negligible investment in innovation to transform business

• ~60% Keeping Lights On – Run the business

• +25% Invested to change the business

• +15% Innovation to transform business

Source: Gartner Expo, 10/9/2006

Chief Concerns of the

Enterprise Customer

How can I best use my IT resources?

What are the benefits of a hybrid IT model?

Cloud computing

…where do I begin?

How can I use cloud

technology to reduce costs?

How can I shift CAPEX to OPEX?

How can I shift my resources to

activities that will change the

business?

Can I avoid lock-in

from proprietary

technologies?

Who can help me build a cloud business case?

Help…I’m running out of

data center space!

19

PERIODIC FAST GROWTH

BURSTING CYCLICAL

What Shape is Your

Demand Graph?

THEY ARE NOT FLAT!

20

IF DEMAND IS FLAT, CLOUD WILL BE MORE EXPENSIVE THAN DEDICATED

LUCKILY THOUGH…

21

THE MAJORITY OF WORKLOADS EXHIBIT SOME VARIATION IN DEMAND

Matching Capacity

to Demand

22

CLOUD IS FOR EVERYONE,

NOT EVERYTHING

Every

Firm

Not

Every

App

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Workload

Public Cloud Private Cloud Dedicated

ELASTIC CONSISTENT

HIGH

LOW

Document

Management

Security

Mail and Collaboration

APPLICATION

CENTRIC APPROACH

eCommerce

Web Content

STANDARD CUSTOM Environment

Analytics and Reporting

Software Development/

Test

Business Critical Applications

•Security •Availability

Disaster

Recovery

Mission Critical

Applications

•Security •Availability •Performance

Web Enablement

Ente

rpri

se R

eso

urc

e C

om

mit

me

nt

Legacy IT Oracle PeopleSoft SAP

Industry Standard Apps SharePoint Exchange HVD SaaS platforms

Enterprise Cloud-based IT Web Workloads Web 2.0 application platforms New Applications

Identify the applications & workloads that are best suited for a cloud our hybrid hosting solution.

Cloud

The standard

progression to

the cloud

Virtualization

Several

Approaches

Low

C

ust

om

izat

ion

High # Apps Low # Apps

Hig

h

Cu

sto

miz

atio

n

• Legacy Apps • Core Enterprise Apps

• Apps built for “Cloud” • Greenfield projects • Web architectures and

platform services

Cloud

Infrastructure

Legacy Infrast.

Hybrid COMPUTING

RackConnect™

VIRTUALIZED CUSTOMER DC DEDICATED HOSTING CLOUD

RACKSPACE

LEGACY APPLICATIONS WEB ENABLED APPLICATIONS & WORKLOADS

¹Source: Gartner's Top Predictions for IT Organizations and Users, 2010 and Beyond: A New Balance

Agility, Flexibility & Speed to Market

- ability to respond to internal pressures & market demands

Scalability - no longer restricted by data center’s capacity

Utility Pricing - ability to leverage cost effective cloud computing

Upgrades - access to latest technologies without major CAPEX investment

Resource Optimization - internal IT talent shifted to business critical activities

Business Continuity & Disaster Recovery

Innovation & Thought Leadership - open technologies at web scale

Standardization & Control

- computing, networking and management platforms

Efficiency - reduction of HW/SW platforms, tools & processes within a data center

Cost Reduction

- improve data center & app. workload

economics

ADDED BENEFITS OF A HYBRID SERVICE PROVIDER MODEL

A Service Provider model

provides ADDED VALUE

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Why Cloud…

28

COST

INNOVATION

SECURITY & PERFORMANCE

EFFICIENCY

AGILITY

THANK YOU

DATA CENTER VIRTUALIZATION BENEFITS

ENTERPRISE PRE-DATA

CENTER CONSOLIDATION

Virtualization is a start

but doesn’t solve

everything

VIRTULIZED CUSTOMER DATA CENTER

Standardization & Control

- computing, networking and management platforms

Efficiency - reduction of HW/SW platforms, tools & processes within a data center

Cost Reduction

- improve data center & app workload

economics

BUSINESS CHALLENGE Common pre-consolidation characteristics

On-premise computing with underutilized technology

Inadequate capacity and space management issues

Multiple siloed facilities: owned or leased

Aging infrastructure is inappropriate for next generation HW

Heavy CAPEX expenditure

Increased pressure to “do more” with less

Most Enterprises recognize the

need for Data Center

Consolidation and are working

toward Virtualization.

Demand for Data Center space is up +20% per year (W. Europe/US)¹

¹Source: Gartner's Top Predictions for IT Organizations and Users, 2010 and Beyond: A New Balance