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I agree it doesn't sound very good for Rackspace and I would have really hated the phone signup hoops they apparently make you jump through for no good reason.

> But the prices are a fraction of what it would take to run on EC2.

I'm not sure that's true for every use case. When I moved away from MediaTemple in search of a real virtual server, I wanted a major hosting company that gave me a reasonably good web interface and community support, which is why in the end I just had to decide between Rackspace and EC2:

On Rackspace you can have a 512 MB RAM instance with 10 GB in and 1 TB out (I'm not sure how much disk space) coming an at $202.70 per month. Now, EC2 is more complicated because they make you pay for things like I/O operations, but base cost for a Micro instance with 613 MB RAM + 10 GB in and 1 TB out makes $175.70 plus some change for I/O. So from where I'm standing they're both in the same league with pricing, and it's not surprising that the major component of each offering is bandwidth cost, both offered at comparable levels. Just the servers themselves cost $22.08 at Rackspace and $5.11 at Amazon.

Obviously, this is all with a big YMMV. In my case, I went with AWS, mainly because it felt cheaper and was easier to set up from Germany (this is where the phone verification shenanigans come in the article is talking about). They say EC2, especially the EBS-based Micro instances, are slow and crappy. But my instance is pumping out moderately complex PHP pages to visitors at a rate of about 8 requests/second, with an average speed of 10 milliseconds per request, with a Linux load avg of 0.04. I'm quite happy about that. So that's not a high load scenario but my guess is it's fairly typical for some dude with a couple of low-profile web projects - and EC2 was the right choice for that.

Sorry, I kinda rushed that comment. Yeah, Rackspace is cheaper on the smaller scale / low end.
They do have superb customer support though. I've been quite pleased with them from that perspective.
The author is chronically unhappy with everything (apparently Amazon EC2 also sucks). Complexity of the password for his account? A checkbox? Really?

Rackspace is a great company with strong ties to developing open source software. They are reliable and professional. Amazon EC2 is also an excellent service. I use both.

I'm actually overjoyed to be living in a world where companies like Rackspace and Amazon are possible, it still blows my mind that I can rent a hundred machine cluster for $10 an hour.

I wrote up the article at the end of a long and frustrating day, and looking back on it, the tone's all wrong. I still stand by the content, but it needs way more context and the equivalent of smileys surrounding it.

Amazon´s bar has ruined the Internet for the rest of businesses. Now if you have to make one click too many or wait a minute there's going to be a blog post about it.

I'm just amazed that if I'm thirsty I touch something and I get instant water and if I'm cold I touch something and quickly it gets warmer. I enjoy things like these every day that only three or four generations ago not even kings had.

Amazon´s bar has ruined the Internet for the rest of businesses. Now if you have to make one click too many or wait a minute there's going to be a blog post about it.

Oh no! The Internet is getting better, more user-friendly! It's terrible, it's a disaster! /sarcasm.

I had an interesting conversation with Rackspace this week that I found pretty amusing.

My company is putting together a project that will ramp up to around $3 million / yr in hosting costs, give or take, within two years and continuing on for the winning hosting provider indefinitely. It is a bit of a surprise contract so we are in a big hurry to get a third of that capacity up ASAP. We have several options and Rackspace /was/ near the top of the list.

So I am in a meeting with someone from their engineering staff, a sales guy, our lead operations engineer and our top sales guy.

So our sales guy, doing his job, asks their sales guy "Is there anything else you can do for us." (referring to price) "I mean this deal is worth about $3 million/year" and the Rackspace sales guy replies "Well we are a $700 million dollar a year company so no, we do these kinds of deals all of the time."

I was floored...My immediate thought was "Well, I guess you won't be a 703 million dollar a year company."

if you have that kind of scratch to throw at the problem, why are you not buying your own hardware?

I mean, outsourcing is great if you need to scale up fast, but if you are at that kind of scale, you will quickly save a lot of money if you can move some of your longer-term load off to your own hardware. Your monthly cost is going to be a rather large fraction of the capital cost of the hardware, and difference between the capital cost of harware+co-lo fees and what an outsourced server rental will charge at that scale is more than enough to amortize out the cost of a good sysadmin and a hardware grunt or two.

We are definitely exploring this option but it will have to wait until after we ramp up because we have to do it in such a hurry.

Not only that but I'd like to stay out of the hardware business as much as possible. If we have to pay a premium to do so we have to pay a premium...depending, of course, on the size of the premium.

We've fallen into the trap before of "We can do this. We'll just roll our own and save some cash." It has, without fail, ended up being more trouble than it is worth. Granted, that was on a much smaller scale so its not like we were hiring people just to handle that aspect (at first) but there is a lot to be said for focusing on core competencies and ours is software.

My first concern, funny enough, was not the cost but the loss of control...there is something almost aesthetically pleasing about owning the whole stack. But, surprisingly, I've found that it feels like we are actually more in control when I can pick up the phone and say "This is what I want done." or "We are having a problem. Fix it." and not have to worry about "Is this key person in my organization trying to help fix some hardware problem when they should be working on 'x'?" etc, etc. And if the provider becomes too much of a problem, we know we can always fall back to doing it ourselves.

>We are definitely exploring this option but it will have to wait until after we ramp up because we have to do it in such a hurry.

yeah, that's the big advantage of outsourcing. I was just pointing out that you should make sure you are aware of and okay with the premium you are paying if you keep the outsourced stuff around for more than a few months.

At least he got thought a real person at the end, for most VPS/Cloud provider you never got this chance... That guy is seriously picky, I don't know why people just chill and instead of complain just build awesome stuff...
I have had a working relationship with Rackspace as a web developer and reseller of hosting services for the past 18 months. I have yet to find a competitor that can come close to meeting the high-level of customer service that Rackspace has to offer. I am not sure that you complaints are worthy of such harsh words. I would strongly encourage that you stick with them and see how the relationship transpires. I an certain you will change your tune.