5 ms·

things must be getting bad at rackspace

SOLAR_FIELDS 9y ago
Things seem to have gone downhill since the purchase last year - I remember they laid off a bunch of people earlier this year since they weren’t very profitable. Probably a maneuver to try and turn the money ship around.
- GradysGhost 9y ago
  That layoff happened a couple months after upper management claimed there would be no layoffs.
pm90 9y ago
Yep. Luckily I left before the acquisition. Every single person in my (ex) 11 person team left for other opportunities, including managers. And it was a pretty awesome team :(. Even the best recruiters left. I mean come on. They're trying to be a support company for other cloud providers. I'm sure there is a market for that kind of service but not sure how much margin there is to be made. I keep saying this but: if your company has been acquired by private equity firms, consider moving asap. Most of these firms will strip the company bare, cut expenses to the bone and try to sell the company to someone else for a profit. While this strategy may work very well for traditional manufacturing firms, I'm highly skeptical of software/tech companies. Its a real shame. Rackspace had some of the best systems engineers I had worked with...
- Chaebixi 9y ago
  > Most of these firms will strip the company bare, cut expenses to the bone and try to sell the company to someone else for a profit. While this strategy may work very well for traditional manufacturing firms, I'm highly skeptical of software/tech companies. I don't think it works well for any industry. My understanding is private equity has a really bad track record of ruining the long term future of the business it touches. They're just skilled at getting the cash out and selling the business to a chump before things get bad.
  - ubernostrum 9y ago
    I don't think the parent comment disagrees with you on the effect private equity has on the targeted company. I think the question they were asking was whether a primarily tech company can produce the profits the private equity wants from destroying the company, since tech companies don't have the kinds of assets that, say, a manufacturer does (factories, tools, etc.).
    - rpedela 9y ago
      If Rackspace has a decent patent portfolio, then that would be just as valuable as factories, tools, etc if not more valuable.
- GradysGhost 9y ago
  Same here. I left a few months before the acquisition. I found out about the acquisition through a news article, probably on Reddit, and I contacted a friend of mine still working in Support there about it. I had heard about it before he did, which is a strong indication of how bad (and, IMO, propagandistic) communication had become between the grunts, the revolving door of upper management, and the fat waistband of middle management.
- stingraycharles 9y ago
  > They're trying to be a support company for other cloud providers. I'm sure there is a market for that kind of service but not sure how much margin there is to be made. I’ve seen that happen at one more big dedicated/colo hosting provider. Once the cloud started catching on with enterprises, they couldn’t resist the consultancy money of helping them in the migrations, and now they’re stuck being dependent on those types of contracts. It takes a strong spine to resist this type of money, but when you do, make sure to invest it wisely.
  - bdcravens 9y ago
    What's interesting is the shift from pushing their own cloud solution.
    - dforrestwilson 9y ago
      Eh Amazon won that battle 2 years ago when they inked a partnership.
    - pm90 9y ago
      They tried to push an OpenStack based public cloud. It just didn't work that well.
- CM30 9y ago
  > I keep saying this but: if your company has been acquired by private equity firms, consider moving asap. Most of these firms will strip the company bare, cut expenses to the bone and try to sell the company to someone else for a profit. While this strategy may work very well for traditional manufacturing firms, I'm highly skeptical of software/tech companies. For anyone in a web hosting role, I suspect the same would probably apply if EIG bought the company. Those guys have a pretty lengthy record of buying out successful hosting companies and driving them into the ground. https://researchasahobby.com/full-list-eig-hosting-companies-brands/ https://researchasahobby.com/full-list-eig-hosting-companies...
bdcravens 9y ago
I can't speak to how the company is doing, but I think the move to focus less on their own cloud offering to AWS support/management is quite telling.

Things seem to have gone downhill since the purchase last year - I remember they laid off a bunch of people earlier this year since they weren’t very profitable. Probably a maneuver to try and turn the money ship around.

GradysGhost 9y ago
That layoff happened a couple months after upper management claimed there would be no layoffs.

pm90 9y ago

Yep. Luckily I left before the acquisition. Every single person in my (ex) 11 person team left for other opportunities, including managers. And it was a pretty awesome team :(. Even the best recruiters left. I mean come on. They're trying to be a support company for other cloud providers. I'm sure there is a market for that kind of service but not sure how much margin there is to be made. I keep saying this but: if your company has been acquired by private equity firms, consider moving asap. Most of these firms will strip the company bare, cut expenses to the bone and try to sell the company to someone else for a profit. While this strategy may work very well for traditional manufacturing firms, I'm highly skeptical of software/tech companies. Its a real shame. Rackspace had some of the best systems engineers I had worked with...

Chaebixi 9y ago
> Most of these firms will strip the company bare, cut expenses to the bone and try to sell the company to someone else for a profit. While this strategy may work very well for traditional manufacturing firms, I'm highly skeptical of software/tech companies. I don't think it works well for any industry. My understanding is private equity has a really bad track record of ruining the long term future of the business it touches. They're just skilled at getting the cash out and selling the business to a chump before things get bad.
- ubernostrum 9y ago
  I don't think the parent comment disagrees with you on the effect private equity has on the targeted company. I think the question they were asking was whether a primarily tech company can produce the profits the private equity wants from destroying the company, since tech companies don't have the kinds of assets that, say, a manufacturer does (factories, tools, etc.).
  - rpedela 9y ago
    If Rackspace has a decent patent portfolio, then that would be just as valuable as factories, tools, etc if not more valuable.
GradysGhost 9y ago
Same here. I left a few months before the acquisition. I found out about the acquisition through a news article, probably on Reddit, and I contacted a friend of mine still working in Support there about it. I had heard about it before he did, which is a strong indication of how bad (and, IMO, propagandistic) communication had become between the grunts, the revolving door of upper management, and the fat waistband of middle management.
stingraycharles 9y ago
> They're trying to be a support company for other cloud providers. I'm sure there is a market for that kind of service but not sure how much margin there is to be made. I’ve seen that happen at one more big dedicated/colo hosting provider. Once the cloud started catching on with enterprises, they couldn’t resist the consultancy money of helping them in the migrations, and now they’re stuck being dependent on those types of contracts. It takes a strong spine to resist this type of money, but when you do, make sure to invest it wisely.
- bdcravens 9y ago
  What's interesting is the shift from pushing their own cloud solution.
  - dforrestwilson 9y ago
    Eh Amazon won that battle 2 years ago when they inked a partnership.
  - pm90 9y ago
    They tried to push an OpenStack based public cloud. It just didn't work that well.
CM30 9y ago
> I keep saying this but: if your company has been acquired by private equity firms, consider moving asap. Most of these firms will strip the company bare, cut expenses to the bone and try to sell the company to someone else for a profit. While this strategy may work very well for traditional manufacturing firms, I'm highly skeptical of software/tech companies. For anyone in a web hosting role, I suspect the same would probably apply if EIG bought the company. Those guys have a pretty lengthy record of buying out successful hosting companies and driving them into the ground. https://researchasahobby.com/full-list-eig-hosting-companies-brands/ https://researchasahobby.com/full-list-eig-hosting-companies...

bdcravens 9y ago

I can't speak to how the company is doing, but I think the move to focus less on their own cloud offering to AWS support/management is quite telling.