In 2018, managed services provider Rackspace unveiled Service Blocks, a programme designed to reduce added costs and wastage among customers running workloads in the public cloud. It covered customers on Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP), with pricing matched to the stage each company had reached in its cloud adoption.
The programme was developed under the leadership of Rackspace’s Australian team. It grew out of customer dissatisfaction with how inflexible managed cloud services were.
The people behind it
Emma Pudney, then director of professional services at Rackspace A/NZ, led the effort. She said wastage in infrastructure was a very common complaint. In her telling, the traditional managed services model, Rackspace’s included, was a single monolithic package. She compared it to an ice cream stall with just two flavours: customers could not choose what they needed, so some of what they paid for went unused.
Service Blocks was meant to let customers pick only the elements that delivered value to them. Pudney also described how customer needs changed over time. When Rackspace launched its AWS offering, it helped customers deploy cloud for the first time, which she said was highly valuable. About 18 months later, she said, many of those customers had become more experienced and felt the original service no longer gave them enough.
She said that new cloud users tend to be tactical and transactional, while more advanced users focus on automation. Customers also disliked how providers charged for services and infrastructure, she said, and wanted services that matched where they stood on the value chain.
How the blocks were structured
Rackspace divided the offering by need: cloud architecture, deployment, operational support, cost governance and complex cloud operations. Each block had its own pricing model:
- Architecture and infrastructure were sold as a single payment.
- Operations were charged as a percentage fee.
- Complex cloud operations were sold as a monthly subscription.
Rackspace pointed to a Technology Business Research (TBR) report that cited unexpectedly high costs as one of the biggest sore points for businesses moving to the cloud. Pudney also said companies worldwide were growing more cloud-savvy as they hired more skilled staff.
Channel reaction
Rackspace said all of its Australian distributors would have access to Service Blocks, including Telarus, which had recently signed with the company. Pudney had expected some resistance from cloud channel partners, because a cheaper offering could reduce their sales revenue. She said reception had instead been positive.
Her reasoning was that providers were focused on lowering cloud costs. Customers who save money, she argued, are more likely to stay and to reinvest in other services. She cited research suggesting that cutting infrastructure costs at the start leads customers to spend more over the long term.
What happened next
Service Blocks went on to become a global Rackspace offering. According to ARN, Pudney described the difficulty of getting an idea from Australia accepted by a company headquartered in the United States. She won the Innovation category at the ARN Women in ICT Awards in 2019 for conceiving and promoting Service Blocks.
Rackspace Technology later named her chief technology officer for Asia Pacific and Japan. In that role, according to the company, she also scoped and led the technical integration for its partnership with KDDI in Japan. B&T reported that she later left Rackspace to become chief technology officer of the furniture retailer Koala. Her LinkedIn profile says she later left Rackspace after 18 years in total and moved to the data centre operator LightEdge, where she became chief operating officer.