Rackspace Clarifies Slicehost Shutdown, Cloud Servers Transition

Rackspace told customers earlier this week that it would kill Slicehost sometime within the next year.

Slicehost, which Rackspace acquired in October 2008, gave Rackspace the ability to offer developers "slices" of Xen-based virtual servers that are cheaper and easier to use than traditional dedicated servers. The Slicehost acquisition, coupled with Rackspace's Jungle Disk storage buy in the same month, was seen as a direct swipe at Amazon's Elastic Compute Cloud (EC2) and Simple Storage Service (S3) cloud offerings.

Slicehost users will be transitioned to Rackspace Cloud Servers, the company told users in the letter. Word of a Slicehost shutdown shot a ripple of fear through its loyal user community. Slicehost users feared loss of functionality and increased costs through what they perceived as a forced move to Rackspace Cloud Servers, many said on a Slicehost user forum.

But in a lengthy question and answer posting about Rackspace's severing of Slicehost, the San Antonio-based cloud and hosting player laid out the migration plan and detailed the pricing structure.

"There are several changes that will happen in preparation to merge into Cloud Servers, but we will work to minimize the impact on our customers," Rackspace said. "The final conversion from Slicehost to Rackspace will be managed via a one-click conversion tool that will automate the conversion process."

Rackspace said it is not making the change to boost prices or increase its revenue. In fact, the company said, it expects many customers to pay less as they move to Cloud Servers from Slicehost.

"The Rackspace Cloud Server offering is cheaper; its utility-based pricing starts at 1.5 cents per hour, and bandwidth is billed at $0.18/GB/out and $0.08/GB/in," Rackspace said.

Additionally, Rackspace Cloud Servers users will be able to add and delete servers as needed and only pay for the time used.

Rackspace told users that Slicehost and Rackspace Cloud Servers have very similar functionality, but a few key differences include downsize slices; differences in slice sizes offered; and the price change. For instance, with Slicehost a 256 MB slice costs $20 per month and up to $800 per month for 15.5 GB, while 256 MB of Rackspace Cloud Servers averages $10.95 per month and $700.80 per month for 15.5 GB.

Also, in the Slicehost model, backups are stored locally while backups can be stored independently in the Rackspace Cloud model.

Rackspace added that it continues to bulk up its product portfolio and is in the midst of a major investment to build out its cloud products, providing a host of new options for Slicehost customers.

"New services to Slicehost users would include Cloud Files, Cloud Load Balancing, hosted e-mail options, hosted calendars, hosted SharePoint, managed cloud, backup/virtual drives to cloud (Jungle Disk) -- all from Rackspace."

Along with the cloud products, Rackspace continues its transition to OpenStack, its open source cloud stack, which will add more features and functionality.

Rackspace cautioned that the move will occur within the year and Slicehost customers won't feel an immediate impact.

"Nothing that directly impacts Slicehost customers will occur in the next 30 days," Rackspace said. "We hope to complete all the transitions in the three-to-twelve-month timeframe (to be complete by May 2012). Once we automate the migration process, we'll announce that the migration period has opened, and you can choose when you want to migrate."