How Rackspace is taking on Amazon now

March 20, 2013: 8:12 AM ET

The cloud services provider has a secret weapon in its quest against the dominant Amazon: free software.

130117065314-facebook-server-room-gallery-horizontalFORTUNE -- When it comes to cloud computing services, Amazon (AMZN) is the clear leader. But San Antonio-based Rackspace Hosting (RAX) has been gaining traction with OpenStack, the open-source cloud computing platform it helped develop. Earlier this month IBM (IBM) announced that all of its future cloud services and software will run on OpenStack. Other tech heavyweights--including Hewlett-Packard (HPQ), Dell (DELL) and Intel (INTC) are now backing OpenStack.

The downside to this growth? Rackspace, along with its various partners and customers, seems to be having a hard time finding enough technical workers with "open" cloud computing skills. "The skills needed to build websites, like HTML and PHP [computer languages used in web development] are pretty mature," says Graham Weston, chairman and co-founder of Rackspace. "But the new skills are running those apps on a cloud-based server infrastructure--you just can't go to college to learn those languages."

That's why Weston, a real estate tycoon who got his start marketing organic pork, is launching the Open Cloud Academy, a new certification program which aims to provide the "advanced technology training" needed to become a "top entry-level open cloud technologist." The small school, based in San Antonio (near Rackspace's headquarters), will teach six- to eight-week-long courses in software development, network security and cyber security. Rackspace says 91 people are already enrolled in the first pilot program, free of charge (future students will pay about $3,500 for the course). The new academy will give preference to military veterans, and Weston says Rackspace will hire about a third of graduating students. Eventually, he hopes to reach upwards of 1,000 graduates and open up online-only courses. "It's an intensive, boot camp style of learning--there's no lollygagging or football games here," says Weston.

It's unlikely the Open Cloud Academy could provide a significant boost to Rackspace in its uphill battle against Amazon any time soon. But the more companies backing OpenStack—and the bigger the qualified pool of technical workers on the market—the more Rackspace can sell its vision of a standards-based, open approach to cloud services. As¬†Robert LeBlanc, IBM's SVP of software said in a release announcing his company's support for OpenStack: "The winner here will be customers, who will not find themselves locked into any one vendor--but be free to choose the best platform based on the best set of capabilities that meet that needs." At least, that's the plan.

Luckily, Rackspace isn't the only company concerned with the cloud computing "skills gap"—Piston Cloud Computing, another player that's building on top of OpenStack, is also offering a range of OpenStack training seminars, aimed at IT professionals. It's rumored other backers will follow suit with their own attempts at advancing OpenStack skills. Why does this matter? Just look to another open-source technology, Linux, which gained critical mass after vendors pushed to arm professionals with the necessary training—and, even more significantly, after IBM threw its weight (and mega-dollars) behind the then-fledgling operating system. It's still early days but OpenStack could be heading down a similar trajectory.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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