From Rackspace to Bulletproof to Melbourne IT, is public cloud partnering a deal with the devil?

It's been five years since Amazon Web Services launched its AP-southeast-2 region in Sydney in 2012, and more than a decade since AWS launched properly in 2006.

Ushering in what we now all call 'cloud computing', AWS kickstarted a revolution in IT that is still working its way through.

Of course, AWS didn't spring fully formed into a world devoid of computers. Before we had cloud, we had hosting, both physical and virtual, and there were plenty of companies offering to rent you a server.

But when behemoths like Amazon, Microsoft and Google decides to muscle in on your market with a more compelling offer, it's time to consider your future.

The days of vanilla VM hosting might be over, but what has replaced them? CRN spoke to some local and overseas companies about their perspective on hosting in the age of the hyperscalers.

Is competition possible?

Since AWS brought a local presence to Australia, many people believe that competing with AWS is impossible, and that you would be a fool to try.

"AWS hitting shore changed the game," said Jeremy Apps, capability architect, enterprise services, Melbourne IT. "You could make a couple of decisions right there and then.

"You could try to fight it, which I think is ultimately a losing fight, you could partner and work with them, or you could just close doors and get out of Dodge altogether," he said.

Melbourne IT chose to partner. The company is now an AWS Premier Partner, as well as a Microsoft Azure partner, and it seems to have fared reasonably well, with its share price rising steadily over the past couple of years.

Another local hosting outfit, Bulletproof, has similarly aligned itself with hyperscalers, first AWS and more recently Azure. Publicly listed Bulletproof has had more mixed results, with its share price falling from around 40c when it reversed into the shell of Spencer Resources in late 2013 to currently trade at around 9c.

Bulletproof has recently undergone a restructure to turn around its profitability, including making 30 full-time positions redundant from its engineering department in a bid to save $4.5 million.

Hosting provider Rackspace famously tried to go it alone for many years, spawning the OpenStack private cloud software in the process. It finally succumbed in 2015 and became a reseller of Microsoft Azure, and then added AWS a year later.

Rackspace just this week announced it was ramping up its AWS partnership to help drive more workloads into the public cloud.

"We've always been a services business," says Angus Dorney, general manager of Rackspace ANZ. "We've been a strong partner of Microsoft for many years, and we're now one of AWS' largest cloud partners."

Rackspace has chosen to focus "higher up the stack" and move into application services from the likes of SAP, Oracle, and Peoplesoft. By combining higher-value application services with complementary software, people, and processes, Rackspace believes it can bring its trademarked "fanatical support" to more than just infrastructure.

"Clouds are product-centric, so services are complementary," says Dorney. "Professional services is a fast-growing part of our business."

Next: Is it a deal with the devil?