Public Cloud Warfare: Rackspace CTO Calls Out Amazon Over Dedicated Instances Claims

In a Tuesday blog Engates said even though AWS chopped prices on EC2 instances by as much as 80 percent, they still cost more on a total-cost-for-performance basis than do true dedicated servers, like the ones Rackspace offers.

Amazon also cut its per-region fee, an additional charge for each region in which a customer runs a dedicated EC2 instance, from $10 to $2. "But a lower unit price doesn't always mean lower costs overall," Engates wrote.

[Related: Amazon Cloud: Is it Good for the Channel? ]

Rackspace, Engates said, is more focused on support and performance than it is on offering the lowest unit prices. Rackspace's cloud offering delivers more value for the dollar to customers when these factors are taken into account, he said.

"We at Rackspace encourage customers to consider the total cost for the specific level of performance and support that their business requires," Engates said in the blog post.

Rackspace pioneered OpenStack, which Engates said offers wider compatibility than the AWS proprietary cloud.

But the "real conflict," he said, "lies in the way that AWS defines dedicated computing, which is at odds with the view of the rest of the industry, including Rackspace."

For example, EC2 dedicated instances don't provide the true isolation that customers get on dedicated, bare metal servers that Rackspace runs on, Engates said. Dedicated servers are completely isolated from the public cloud, he added.

EC2 dedicated instances that run on the customer's hardware are still connected to Amazon's public cloud, Engates said. "You're just a dedicated, single-tenant slice of that cloud. If the AWS public cloud suffers an outage, you will be affected," he said.

Amazon did not respond to a request for comment on Engates' remarks.

Rackspace and AWS are rivals in a public cloud market that Gartner has said could be worth $130 billion by the end of the year. Both companies have been slashing prices.

"AWS absolutely has a head start and has a lot of developer traction," Rackspace CEO Lanham Napier said in May during Rackspace's first-quarter earnings call. "Our personal belief is that open source is a better development model and framework than a proprietary system. Over time, there will be more developers contributing code to OpenStack than Amazon Web Services could ever hire. I just think right now, they got a developer head start, and it's early in the game."

PUBLISHED JULY 16, 2013