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Why Rackspace Bought SharePoint911

Rackspace's acquisition of SharePoint911, announced last week, is intended to further the company's reach as a provider of cloud-based SharePoint implementations. But in a departure for the hosting and cloud services provider, the move also aims to give Rackspace a stake in supporting premises-based deployments of SharePoint.

Unusual as that might sound, the acquisition of SharePoint911, a leading boutique firm of Microsoft MVPs specializing in Microsoft's collaboration platform, is the latest step in Rackspace's effort to expand from a provider of pure hosted services to one that offers hybrid cloud offerings by adding support for installations running in customers' datacenters.

That transition began with Rackspace's widely publicized OpenStack project, aimed at letting customers use the open-source platform from Rackspace or other vendors supporting the project to deploy private clouds in their datacenters, explained Jeff DeVerter, a SharePoint architect at Rackspace. With OpenStack, the company has rolled out Rackspace Cloud: Private Edition and most recently tapped partner Redapt to help customers build private clouds based on the Rackspace implementation of OpenStack.

"Our tagline here is 'Fanatical Support.' We now are talking about 'fanatical anywhere' where we will reach out of our datacenter," DeVerter said in an interview. "First was to support OpenStack out of [customers'] datacenters. Now being able to support SharePoint wherever it might be ultimately will drive SharePoint adoption because we believe SharePoint is here to stay. It's what customers are using and we want them to be successful in bringing in this level of capability, which is what was required."

Rackspace entered the business of offering managed SharePoint services back in 2008. The idea at the time was to get more people to use Rackspace to host their SharePoint servers. The hosting provider handles configuration and installation of SharePoint and provides central administration. Rackspace also will create all the major SharePoint containers and ensure that a farm is running well. But if an end user didn't know how to upload a document or a customer wanted to create custom apps, that fell out of Rackspace's realm, according to DeVerter.

Customers fail to use SharePoint to its full potential, he argues, and as a result, Rackspace saw an opportunity to expand its SharePoint business to address such areas as application development and end user training. That means supporting SharePoint installations that run both inside its hosting facility and in customers' (or even other providers') datacenters.

"We will get into supporting stuff outside of our datacenter," DeVerter said. "That's obviously a business-changer for us at RackSpace as we have primarily only done work that has been inside any of our datacenters that are around the world. SharePoint911 has built their business on really helping get out of problems and work inside of SharePoint, regardless of where they are. They have supported some of our customers in our datacenter, and they've got people that they support all around the world in other datacenters or in their own company's datacenters. So we will continue that model. It will take some learning on our part to know how to do that well, but we are committed to having the best SharePoint experience for our customers, whether that's inside our datacenter or outside."

I spent some time chatting with DeVerter, who was joined by SharePoint911 founder Shane Young, about the deal. Here are some edited experts from that conversation:

Is Office 365 a threat?

DeVerter: The reality is, Office 365 is one of the best things that's happened to SharePoint because it really takes that SharePoint 2010 experience and makes it very accessible to people that require a low-cost-of -entry environment. But the problem still ends up that people need help getting moved into SharePoint and making it a compelling solution to transform their business. SharePoint911 today has a lot of customers who run inside of the Office 365 space, and one of their MVP consultants, Jennifer Mason, is a strong contributor to the knowledge base inside of Office 365 on how to be successful in that area. We could expect to continue to assist from the support perspective in Microsoft's datacenter for Office 365.

Are typical Office 365 customers those who already have SharePoint premises-based deployments?

DeVerter: My experience has been they aren't. They are either smaller SMBs or large enterprise customers but more of a department inside of there who are trying out SharePoint and trying to solve a specific scenario. The reason we don't see Office 365 as a threat is because people will learn about SharePoint and the things it can do and how it transforms their business but Office 365, as a fully integrated enterprise solution, really isn't there yet at this point. And so as customers grow up in SharePoint, often times we find them coming to Rackspace. From a historical perspective, we are taking those Office 365 customers to the next level as they grow up and out. So with the addition of SharePoint911, we will be supporting Office 365 customers.

Young: We haven't seen anyone in our customer base that has taken an existing internal deployment and moved it into Office 365.

Are those that are using Office 365 using it as a test bed to get into a premises-based version of SharePoint?

Young: A lot of people are just kicking tires. I don't know where they will end up yet but I do see it as an opportunity to figure it out at a low price point. Where they go from there, as they grow up and mature in what they want to do with it, is something we will start figuring out in the next couple of months, from the wave of people we've seen. I think a lot of the people who have adopted Office 365 are still in that exploration phase. They haven't been in it long enough to decide if it's a permanent solution for them or if they're going to need to grow into something else.

How do you see it playing out?

Young: I think they will outgrow Office 365 as it stands today. It gets you that core collaboration functionality but we've got a lot of people standing up public Web sites on SharePoint, we've got people who want to do BI solutions on SharePoint and Microsoft sees that. But right now, today, if you want to do anything more than straight-up collaboration, it's a challenge in Office 365.

What made you decide to become part of a large organization rather than maintain the boutique operation that you had?

Young: I had been involved with Rackspace since Jeff came on board. I did the original training on how to stand up and deploy SharePoint. I helped Jeff architect the solution there and it's really a company that I have believed in all along. It really speaks volumes. The other part of it is the entrepreneur in me. I've been the guy running the ship for almost seven years now. They have a lot of ideas, a lot of directions that I wanted to take that we've never been able to do because we were privately funded. Now that we are part of Rackspace, there's a laundry list of services that we can offer to the SharePoint world that barely exists today. It will give me a chance to really run with some of those ideas I've had over the years.

Can you describe those ideas?

Young: Not at this point. I'm holding that close to the vest until we plan on how we're going to do some of those things.

Understood. How quickly do you see them coming together?

Young: The sooner the better for me. This year.

Is it your understanding that all six of your MVPs will stay on board?

Young: Everyone has come over. The team is actually very excited to be on a bigger stage to do more.

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Posted by Jeffrey Schwartz on 02/27/2012 at 1:14 PM


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