HPE and Rackspace bring pay-as-you-go service to OpenStack Private Cloud

Hewlett Packard Enterprise (HPE) and Rackspace announced they have partnered to provide OpenStack Private Cloud as a pay-as-you-go service. According to the companies, this is the industry’s first pay-as-you-go OpenStack private cloud.

“The launch of OpenStack Private Cloud with pay per use infrastructure delivered by Rackspace and HPE marks a pivotal moment in the private cloud market and in the industry at large,” said Antonio Neri, president of HPE. “This experience is the best of the cloud and on-premises worlds, and we fully expect this simple pay-per-use technology model to change the way enterprises make technology decisions.”

The move is meant to respond to increased interest in public cloud services. The offering allows customers to pay only for what they use like a utility bill using HPE’s Flexible Capacity, making it easier to manage growth and bursts in workloads without paying for fixed capacity. The companies said providing the pay-as-you-go service will make private cloud 40% less expensive than the leading public cloud, an estimate based on Rackspace internal pricing analysis.

“Customers consume OpenStack Private Cloud with pay-per-use infrastructure as a managed service with an industry-leading 99.99 % API uptime guarantee from Rackspace,” the company said in a statement.

The growth in popularity among pay-as-you-go services is reinforced by research firm IDC, which predicts this type of consumption model will constitute 50% of on-premises and off-premises physical IT and datacenter asset spending by 2018. According to Michelle Bailey, group vice president, general manager and research fellow at IDC Research, the offering by Red Hat and Rackspace “addresses organizations needs to provide security and performance benefits, the cornerstone of a private cloud environment.”

Red Hat and Rackspace aren’t the only companies gravitating to a pay-as-you-go model for cloud solutions. Microsoft provides Azure Stack, which places Azure in a private data center. Oracle offers Cloud at Customer, while Google and Cisco intend to provide Google Cloud Platform to customer premises in the foreseeable future.

The companies said OpenStack Private Cloud with pay per use infrastructure will be generally available in all regions on November 28. It will include additional solutions for Rackspace Private Cloud powered by VMware, and Rackspace Private Cloud powered by Microsoft Azure Stack, sometime in 2018.

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