BT targets managed services boost with Rackspace cloud deal

BT inked a partnership agreement with multi-cloud solutions company Rackspace Technology, aiming to enhance its portfolio of managed services for business customers.

As part of the deal, Rackspace will deploy its technology, including its Rackspace Fabric management layer, in BT’s data centers. BT will then run its hybrid cloud services on Rackspace’s solutions, a shift the operator said will allow customers to benefit from the combination of the vendor’s automation, analytics and artificial intelligence tools and its own security and network capabilities.  

The pair also committed to extend their partnership down the line to create joint cloud offerings for their customers.

Bas Burger, CEO of BT’s Global unit, said in a statement the arrangement "accelerates our plans to build a world-class hybrid cloud portfolio."

The deal marks a key win for Rackspace, which remains a smaller player in the rapidly growing cloud market. As of Q3 2021, data from Synergy Research Group showed Rackspace had a cloud market share of 1% or less.

Though Rackspace grew revenue by double digits in Q3 2021 to reach a record of $763 million, its sales pale in comparison to market leaders Amazon, Microsoft and Google, all of which posted multi-billion-dollar turnover in the same period.

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Rackspace CEO Kevin Jones said in a statement the deal with BT “validates Rackspace Technology’s expertise in helping large, multinational enterprises in their cloud transformation journey and provides both companies with unique industry positioning.” He added it also "highlights the enduring long-term value of a hybrid cloud model.”

Earlier this week, fellow multi-cloud company Nutanix released a report which found 86% of enterprises consider the hybrid cloud their ideal operating model, but need more tools for managing mixed cloud environments. Security, data integration and cost were flagged as some of the top multi-cloud challenges.