RedPixie predicts hosting casualties as it hails Azure boom

Microsoft partner claims 15 per cent of its enquiries are from customers wanting to move away from private hosters such as Rackspace

RedPixie has said the "monopoly is over" for hosting firms, which it predicts could "disappear" within two years thanks to the rise of public cloud alternatives such as Microsoft Azure.

The Microsoft partner, which specialises in Azure, claims that about 15 per cent of enquiries RedPixie gets are from customers who want to move to the public cloud offering from hosters such as Rackspace.

Rackspace has made moves in recent years to work with the likes of AWS and Microsoft on its cloud offerings. But RedPixie's CEO Mitchell Feldman (pictured) said this is not enough.

"Their days are numbered," he said. "Rackspace has understood this and they are trying to re-engineer their business to sell Azure. You can see the writing is on the wall for them. We're seeing there is a race for people to move out of Rackspace and Sungard and similar.

"It's driven by a number of things, such as the size of the network. Microsoft and Amazon's networks are significantly more complex, broader and wider than any of those private hosters. The rate of change in technology in the public cloud is far greater than any of the private hosters. And the cost - this is a utility war.

"Microsoft are in a great position because they can leverage economies of scale because they're taking on so many companies and the infrastructure is becoming so effective they can drive costs down. Whereas people such as Rackspace and Sungard have sat pretty, monopolising the market and dictating their pricing. So we are seeing a great demand for people wanting to get out of there as quick as possible."

Feldman said he "absolutely" thinks the number of Rackspace customers who will enquire about Azure with his firm will rise in the coming months and years, and went so far as to predict that within two years, one or two big hosting companies will "disappear".

Rackspace was not immediately available to comment.

Earlier this year, CRN reported rumours that Rackspace was preparing for a sale, but Rackspace declined to comment at the time. The claims came after Rackspace announced it was looking to explore strategic partnerships with other firms in 2014.

Analyst Quocirca's founder Clive Longbottom said the traditional hosting model is "long in the tooth".

"It doesn't solve that many problems," he said. "If you're going to go for physical hosting, you still have all the problems of having to architect the solution upfront and if you are going to provision new hardware, downtime could be involved. Pure hosting is not a good area to be in, [whether you are] selling it or using it."

But he cautioned that it won't just be the big three - Microsoft, Google and AWS - which will be the beneficiaries of the changing market.

"[They] are not the only public clouds in town," he said. "There are plenty of other offerings out there. I don't believe [competitors] are doing badly and that customers are moving away from them.

"Rackspace has done itself no favours by putting itself up for sale and then pulling itself back out. It has to prove to the market that it has some great technologies.

"I agree that hosting will go away. But I don't agree that Rackspace will fail down to that - Rackspace has other issues."

He added that there is a lot of confusion in the market about how cloud and hosting differ from one another.

"A lot of the vendors out there don't help," he said. "A lot of them realise that hosting is old hat, so they are calling hosting cloud, when it's not. A lot of them know their market feels like cloud is too enterprise or expensive for them, so they call it cloud hosting."