London, 29 March 2012 – A new survey released today by Rackspace® Hosting (NYSE: RAX), the service leader in cloud computing, reveals that IT teams from mid-sized UK and US businesses polled still spend over half (56 per cent) of their time on server management and troubleshooting in a typical month, and only 28 per cent on strategic, 'value-added' activities. Despite the widespread availability of cloud and managed hosting, many organisations are clinging to physical servers, leaving in-house IT teams struggling with troubleshooting and capacity planning amid demands from their bosses to do more for less.

The Cloud Reality Check survey provides insight into how IT decision-makers at 500 mid-sized UK and US businesses approach server management and its related challenges. The new survey results are compared to the results of a near-identical study Rackspace commissioned in 2009, No More Servers, which contained responses from the same number of businesses similarly situated. 

Capacity planning, the hard way

The report shows that most UK and US businesses seem to have either made poor progress or taken a step backwards regarding server management. The majority (59 per cent) of UK respondents admit they have either bought too many servers, which has wasted money, or bought too few, which has meant a lack of capacity. In 2009, 55 per cent of respondents said they got this wrong. In the US, the situation is worse: over two-thirds (67 per cent) said they've purchased the wrong number of servers, compared with 47 per cent in 2009.

IT teams at the service of servers

The respondents indicated that UK IT teams spend half (50 per cent) of their time on server maintenance and troubleshooting today, slightly down from 57 per cent result in the 2009 survey. Yet, using these results, a UK IT team member on average would still spend an estimated 912 hours a year* just servicing servers, rather than helping to drive innovation. US businesses reported that their teams spend even more of their time – 62 per cent in a typical month – on server maintenance, and only a quarter of their time (25 per cent) on 'value-added' work.

Server complaints skyrocket

Tellingly, the 'hassle of managing servers' seems to be a problem for far more UK and US businesses now (79 per cent) than was indicated in the 2009 survey (58 per cent). Similarly, top gripes regarding managing servers physically on-site – hardware maintenance (53 per cent), having to be available 24x7 (50 per cent), and the cost of buying and maintaining servers (40 per cent) – are voiced by more respondents in both the US and UK now than as reported in the 2009 survey.

Fabio Torlini, VP of Cloud at Rackspace, says: "Problems associated with having to manage and maintain servers are often readily solved by cloud and managed hosting services. In 2009, one-third (33 per cent) of businesses surveyed expected to outsource their in-house servers in the next two to five years. However, over two years later, the new study suggests that many mid-sized businesses are still chained to their servers, and may be spending unnecessary time and money on them."

Bosses want more of IT for less

A large percentage of UK and US IT decision-makers interviewed said they are under mounting pressure to support business growth and change (89 per cent, up from 65 per cent in 2009), improve flexibility (88 per cent, compared with 66 per cent) and help drive internal innovation (88 per cent, up from 61 per cent). In addition, businesses are also facing demands from the board to reduce IT spending, according to 87 per cent of respondents (up from 65 per cent in 2009).

Jason Cremins, CEO of UK-based digital signage provider, signagelive, which has recently moved its media delivery infrastructure to the Rackspace Cloud, found the move helped his company tackle similar challenges. "We've seen dramatic reductions in operational costs and major improvements in the speed and reliability of our infrastructure after moving to the Rackspace Cloud. The move has also helped our customers. The content delivery business is moving away from in-house physical servers because the near-infinite scalability and reliability of cloud hosting lowers the barrier of entry for our customers and enables them to focus on their core business."

Addressing the issues holding IT back

This year's results show that 38 per cent of respondents now expect to outsource their in-house servers in two to five years (35 per cent in the UK; 40 per cent in the US). Yet, top barriers to moving to cloud hosting – questions regarding security (54 per cent), reliability (47 per cent), and ROI (42 per cent) – are holding back more organisations now than indicated in our 2009 survey. For example, security is seen as a barrier to server outsourcing by twice as many respondents in 2012 (54 per cent), compared with 2009 (27 per cent).

Another factor potentially holding back UK organisations in particular is their approach to new technology. Interestingly, although 28 per cent of UK respondents would describe their company's approach to new technologies, such as on-demand computing, as cautious and reactive, only 8 per cent of their US counterparts would. Conversely, 39 per cent of US respondents would describe their company as a cutting edge, corporate innovator, while only 10 per cent of UK respondents would.

According to Torlini, the way the cloud and managed hosting market is maturing, as suggested by the study, represents a challenge to end-users and cloud and managed hosting service providers alike. "In 2009, almost two out of five (18 per cent) of respondents didn't know what cloud computing was. In 2012, everybody does, and is looking at it – the benefits and the issues. The challenge for mid-sized businesses is to stop unnecessarily holding onto their in-house physical servers, and give themselves a chance to focus on more important and valuable work. The challenge for cloud service providers is to provide the right advice and services to help more of them overcome the barriers to doing just this."

ENDS 

Notes to Editors:

*The 912 hours was calculated by taking the total number of UK working days, subtracting (i) a holiday allowance of 28 days, and (ii) and an 5 sick days (an estimate), multiplying by 50% to get the total number of days that would be attributable to working on server troubleshooting and general server management (based on survey results), and then multiplying that number of days by 8 hours (the typical length of a normal workday).

About the Research 

Rackspace Hosting commissioned independent specialist technology market research company, Vanson Bourne, to undertake the research upon which this report is based. 500 interviews were carried out in January 2012 with senior decision-makers within the IT departments of organisations of between 100 and 500 employees; 250 interviews were performed in the UK, 250 in the USA. Data was collected by online interview, using a rigorous screening process. Respondents came from a wide variety of commercial business areasbecause the Vanson Bourne believed that those results would represent a snapshot of organisations of this size in each country as a whole, rather than focusing on specific sectors. Detailed information and the full survey report for 2012 can be found here

About Rackspace Hosting

Rackspace Hosting is the service leader in cloud computing, and a founder of OpenStack™, the open source cloud operating system. Rackspace provides Fanatical Support ® to its customers, across a portfolio of IT services, including Managed Hosting and Cloud Computing. In 2012, Rackspace has been recognised by the Sunday Times Best Places to Work and Financial Times Top 50 Great Place to Work in the United Kingdom for the seventh year in a row. The company was also positioned in the Leaders Quadrant by Gartner Inc. in the "2011 Magic Quadrant for Managed Hosting." For more information, visit www.rackspace.co.uk.

Forward-Looking Statements

This Press Release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements relating to expected trends of business relating to IT services; any statements of expectation or belief directly relating to Rackspace business derived from the survey results; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include a substantial margin of error in the customer survey results, inconsistencies in respondent's understanding and Rackspace Hosting's analysis of survey questions and results, the possibility that expected benefits from any future IT services offered may not materialize as expected; the achievement of expected operational results from any IT services offered may not be attained; and other risks that are described in Rackspace Hosting's annual report on Form 10-K for the year ended December 31, 2011 as filed with the Securities and Exchange Commission on February 17, 2012. Except as required by law, Rackspace assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

For more information, please contact:

Brooke Hamilton, +442087342574
brooke.hamilton@rackspace.co.uk