Power supply management a critical influence on future of managed hosting - Rackspace MD

Electrical power supply and consumption will heavily influence the development, growth and future direction of the managed hosting and Internet services provision industries worldwide over the next five years.

"We need to be clever about how we deploy our equipment and in the design and specification of our data centres," says Jacques Greyling, newly appointed managing director of the UK operations of Rackspace Managed Hosting, which provides totally outsourced managed hosting solutions to 3 000 companies in South Africa, Australia, Europe and the UK.

"Pressure is building as a result of rapidly increasing demand for electrical power across the board, so we have to find ways of controlling power consumption and the kW/hr costs that are rising rapidly because of this overall demand growth."

South African-born Greyling grew up on a farm near Koster in the North West Province. Originally an industrial process engineer in the automotive industry, he then moved into the IT industry as a field engineer with Datacentrix. He subsequently set up an e-commerce business and worked with major retailers to develop electronic bar coding, product cataloguing and online electronic ordering systems before deciding to broaden his experience and seek work in the UK. He joined Rackspace UK as a support engineer, was appointed director of operations a year later and three years thereafter, as managing director.

"Power is a major cost factor and a potential growth limitation in our business. We already have some 60 000m2 of data centres and we have to deal with power supply creatively if we are to achieve our growth objectives. For Rackspace UK this year our goal is to double our revenue over 2005 from R350 million to R700 million."

Major OEM manufacturers in the IT industry are coming to the party and are designing equipment that draws less power, a case in point being Rackspace`s recent purchase of HP ProLiant servers with dual-core AMD Opteron 200 series processors that offer power and heat load advantages that add up to power efficiencies, better utilisation of data centre space and reductions in electricity costs.

Greyling says development work is also taking place on low-voltage processors and virtualisation products for servers that will better utilise available space and draw less power. Challenges to be overcome in this area include the calculation of costs for customers and reliability. "We are keeping an open mind on these developments and we will certainly look at products that are fully proven and do not represent a risk to our customers."

For Greyling, however, key differentiators in the managed hosting space for the next three or four years will remain people and service levels: "We have to continue building up the faith and trust that existing and future customers rely upon. Rackspace wants to be the organisation that is recognised for its services, specifically the levels of service, enthusiastic support, utmost reliability and the delivery of totally outsourced managed hosting solutions that work.

"Our customer base in South Africa has doubled over the past year. Customer feedback is that our `fanatical support` programme, bandwidth costs that are up to 10 times lower than those generally applying in South Africa and the total reliability of our offering, were major motivations to outsource their Web hosting requirements to us."

Greyling adds that he believes people in the market are becoming more aware of Rackspace and of its capability through the fanatical support approach to provide them with industry-leading services. "The technologies generally employed are becoming increasingly stable so the focus must swing to service, support commitment and attitude as the key differentiators."

The UK-based operations of Rackspace now make up 25% of the global business and the operation has a growth rate that exceeds that of the US operations. Greyling says there is a five-year plan in place for the Rackspace business in the UK that will see employees increase from 164 to 1 085 by 2010.

"Rackspace looks for achievers and clearly understands that people are the most important asset in any company. People who engage their work without reservation will engage their customers with the same passion, dedication and innovation.

"Having been hands-on in Rackspace for more than four years now, I am convinced it is our people and services that set us apart. State-of-the-art equipment and technology are a given these days. It is people and a dedicated approach to service that makes the difference. Our services and support are fanatical by design and we have systems in place that allow us to be fanatical."

The company`s theme for 2006 is "Go Bold". Greyling says this essentially encourages people at all levels to take more calculated risks and implement bold steps to ensure the company`s objectives are achieved.

"One of our targets is to generate 25% of Rackspace UK`s revenue outside the UK. I can see South Africa as a growth point country in which we will in future establish a formal office and infrastructure. We have so many South Africans working for us anyway, primarily because they have the right attitude, are competent, not too specialised and willing to work hard."