Home-Grown Champs: Why Rackspace is Like the Spurs

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Left: Tip-off between the San Antonio Spurs and Miami Heat for Game 2 of the 2014 NBA Finals. Photo by Scott Ball. Right: Rackers collaborate to provide Fanatical Support to their customers. Photo courtesy of Rackspace.

Left: Tip-off between the San Antonio Spurs and Miami Heat for Game 2 of the 2014 NBA Finals. Photo by Scott Ball. Right: Rackers collaborate to provide Fanatical Support to their customers. Photo courtesy of Rackspace.

Rackspace is the San Antonio Spurs of cloud computing. Both call The Alamo City home. What they do is in no way flashy. Both play a team sport in a way that outperforms outfits with much bigger payrolls and star power. So, when I read articles that imply that Rackspace’s best days are behind it, I’m tempted to quote Liz Lemon from 30 Rock: “commencing eye-rolling sequence in 3,2,1….”

It’s often said that there are no “former” Marines, and the same can be said of Rackers. While I no longer work for the company or own stock in it, I take deep pride in my 10 years at Rackspace, and I root for it as avidly as I do for the Spurs.

Rackspace’s workplace culture is built on a foundation that can be summed up in 15 words that my mentor and friend Graham Weston coined one fateful day in collaboration with legendary customer-service expert and Rackspace board member Fred Riechheld.

“Everyone wants to be a valued member, on a winning team, with an inspiring mission,” Weston said.

For decades we Spurs fans have smiled quietly and shaken our heads as the rest of the sports world overlooked the Spurs or talked trash about the team’s decrepitude and shortage of the individual “stars.” I once heard an announcer talk about an unrelated news event at halftime when the Spurs were destroying the other team. Why? Because the Spurs are boring to fans who value drama over winning.

The Spurs applaud their fans during the Spurs celebration at the Alamodome of their 2014 NBA Finals victory. Photo by Scott Ball.

The Spurs applaud their fans during the Spurs celebration at the Alamodome of their 2014 NBA Finals victory. Photo by Scott Ball.

Now, enter Rackspace — in 1999, the same year the Spurs won their first NBA Championship. In 1999, if you would have said that the world’s leading company for managed hosting of business computing would be born about eight blocks from the Alamo, people would have laughed at you. I remember my first quarterly Open Book meeting, when our CEO and chairman got up in front of the whole company and explained our secret sauce, Fanatical Support.

“Raise your hand if you have called your phone or cable company or your Internet provider recently? How hard was it to get someone on the phone?” Everyone laughed. “We are going to do the opposite of that. We are going to answer the phone, every single time, with a real human being who is trained and empowered to fix the customer’s problem.”

Shortly afterwards, I remember hearing my friend James on a sales call with a customer who thought Fanatical Support was just marketing mumbo-jumbo. It was right around Christmas time and James said to the customer: “I want you to call us at 2 a.m. on Christmas Day, and ask the hardest question you can about Linux. And see what happens.”

Open work spaces at the Castle encourage employees to find innovative solutions to grow the business and support customers. Photo courtesy of Rackspace.

Open work spaces at the Castle encourage employees to find innovative solutions to grow the business and support customers. Photo courtesy of Rackspace.

The customer did just that, and he was so impressed with the speed and quality of the response that he ordered 22 servers the next day. That’s how Rackspace rolls. Fanatical Support is as un-flashy as Tim Duncan’s mid-range bank shot. Rackers just keep picking up the phone and helping customers succeed — not just when they call, but pro-actively, when a Racker see something that doesn’t look right in their configuration, or an opportunity to improve their performance. It’s not flashy. It’s not sexy. But with 200,000 business customers worldwide, Rackers make about 30,000 shots a day with the game on the line, and no one else in the game can match that kind of consistency and reliability.

The Spurs were the underdog in just about every one of their championship series. Anyone who can read and count could tell that, statistically speaking, they were championship material. But stats don’t make good TV. Tony Parker leading in assists doesn’t make a good commercial. The broadcasters would rather see the marquee player slam home a 360 dunk or drain a three-pointer from 10 feet beyond the arc.

So, too, with Rackspace, forever the Internet technology underdog. I think it confounds people on the coasts that a company way down in South Texas can weather so many storms and continue to grow and evolve as an industry leader.

After the dot-com bubble burst in 2001, Rackspace had just $3 million in the bank and was losing $1 million a month. You can do the math.  Yet the founders doubled down on Fanatical Support, trimmed costs, and were profitable and growing within a year.

In 2007, when I still worked there, a truck crashed into a pole that supplied power to our primary data center — at precisely the moment when we were servicing our backup generators.  It took down most of the customers in that location. I still have scar tissue from the customers who chewed out my ass that day. Unlike some of our competitors who hide when customers suffer an outage, we answered every phone call and reached out to other customers proactively.  Our CEO went on YouTube to explain with full transparency what had happened and what we were doing about it.

Rackspace went public on the auspicious date of August 8, 2008 (8/8/08) — the same day that Lehman Brothers went under, as the economy slid into the Great Recession. Our stock opened at $12.50, dropped to $10.01 the same day, and within a few months hit $4 and change. Anyone remember that day? The reason you don’t is because Rackers, just like the Spurs, put down their heads and focused on the basics, serving customers. In fact, we reached out to customers who, amid the recession, weren’t using as much computing as they had contracted for.  We let them pay less, at a time when they needed a break.  They never forgot it.  And they told their friends. That is how you reach the top.

Just like the Spurs, Rackspace keeps showing up in the finals. The independent analysts at Gartner Inc., regarded as the “Consumer Reports of business computing,” recently published their assessment of managed-cloud providers and ranked Rackspace number one in both North America and Europe.

When I read that Gartner report, I smiled and pictured people in Silicon Valley and on Wall Street asking: Rackspace who? Exactly. While many founders of startups in the Bay Area roll up to their fancy offices in a new Ferrari, and are angling to sell out in a year or two, Rackers show up for round-the-clock shifts every day at a once-abandoned shopping mall in a once-crappy part of town driving pickups and Toyota Corollas, and work to cultivate relationships with customers who will stay with Rackspace for decades. Have you heard of Verio? Interland? Exodus? Rackshack? Exactly. That is because Rackspace played team ball and outlasted the competition.

To be sure, just like the Spurs, Rackspace commits turnovers, throws up bad shots, and occasionally has our version of Manu Ginobili firing a crazy, no-look, behind-the-back pass that goes awry. That’s when you call time out and regroup. Rackspace has been doing just that, quietly regrouping and getting ready to return to fundamentals.

Manu Ginobili addresses media after the Spurs' win of the 2014 NBA Finals. Photo by Scott Ball.

Manu Ginobili addresses media after the Spurs’ win of the 2014 NBA Finals. Photo by Scott Ball.

If every Racker is to feel that he or she is a valued member of the company, then the company’s top leaders needs to cut loose any manager who can’t inspire his or her team. Rackspace is on a mission to be recognized as one of the world’s great service companies by making computing simple for businesses. It needs to communicate that clearly, inside and outside the Castle in Windcrest. It needs to shrug off the doubters, whether they’re on Wall Street or in the media.

Why am I writing this? Because no current Racker will. Just as coach Gregg Popovich refused to take the stage after the Spurs won this year’s NBA championship, Rackers are reluctant to brag, too. One of the company’s six Core Values is “Substance over flash.” Rackers, like Spurs players, live that value. I, on the other hand, haven’t worked at Rackspace since 2010.

For some of us ex-Rackers, Rackspace is the alma mater where we learned lessons about workplace culture, values and customer service. We try to carry those lessons in our new jobs.  We cheer our alma mater loudly, because we want it to know that we know how great it is, even if nobody there will say so.

Rackers meeting in "Lenscrafters," one of the many themed conference rooms in the Castle. Photo courtesy of Rackspace.

Rackers meeting in “Lenscrafters,” one of the many themed conference rooms in the Castle. Photo courtesy of Rackspace.

Let’s end by playing a little game called “let’s remember.”

Let’s remember that Rackers are everywhere. Just as the disciples of Coach Pop are scattered around the NBA, spreading his methods and values, so too are Rackers. They are leaving to start companies and create new technologies and jobs. They occupy key positions at places like Google, Amazon, Facebook, HP, Cisco — you name it. The reason those companies hire from Rackspace is because it’s a winning team. Top employers don’t hire from losers. They hire from winners. Rackspace headquarters can be seen as a 1.2 million square foot factory that recruits and trains and acculturates winners every single day.

Does anyone remember YouTube? Let’s remember that the first servers of YouTube started in our tiny little Rackspace data center in downtown San Antonio, not in Silicon Valley.

Among other small startups, Rackspace hosted the first three servers for YouTube, which remain behind glass at the Open Cloud Academy. Photo by Iris Dimmick.

Among other small startups, Rackspace hosted the first three servers for YouTube, which remain behind glass at the Open Cloud Academy in the Weston Centre. Photo by Iris Dimmick.

Let’s remember that today more than 60 percent of the global giants in the Fortune 100 are Rackspace customers.

Let’s remember that Rackspace hosts more of the 1,000 most-popular ecommerce websites than any other company.

Let’s remember that of all the thousands of companies in America, Rackspace is a perennial on Fortune magazine’s annual list of Best Companies to Work For, and currently ranks #29.  Let’s remember that Rackspace accepts a smaller percentage of its applicants than does Harvard University.

Let’s remember that when Hurricane Katrina smashed into New Orleans and the Mississippi coast in 2005, Rackspace took in thousands of refugees and wrote software overnight that helped the displaced find missing loved ones.

Let’s remember that Rackspace led the charge to defeat SOPA and PIPA and other proposed federal legislation that would have screwed up the Internet. Let’s remember that Rackspace has led the fight against patent trolls that prey on innovative tech companies.

Lets remember that OpenStack, the open-source platform that IBM, HP, and Walmart are using to build their clouds, was founded by Rackspace and NASA.

On a personal note, I will always remember with advantage that one day 14 years ago, Rackspace took a chance on a 20-year-old local kid with a degree in stacking produce at H-E-B. I started without any technical training or experience.  I couldn’t even spell DNS.  But someone at Rackspace spotted in me a desire to learn and grow and be better than the day before and help customers do the same. And from that desire Rackspace helped me create a personal and professional career that I never imagined for myself or for the other local kids that I was able to bring along.

In the technology world, as in sports, competition grows more fierce every season.  There are fewer and fewer dynasties. That’s why it’s all the more remarkable, and a source of pride, that we have two of the finest here in San Antonio.

*Featured/top image: Left: Tip-off between the San Antonio Spurs and Miami Heat for Game 2 of the 2014 NBA Finals. Photo by Scott Ball. Right: Rackers collaborate to provide Fanatical Support to their customers. Photo courtesy of Rackspace. 

Full Disclosure: The Rivard Report website is hosted by Rackspace. 

This article was originally published on Wednesday July 23, 2014.

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20 thoughts on “Home-Grown Champs: Why Rackspace is Like the Spurs

  1. Nice write up Lorenzo, very well articulated. As a Racker and Spurs fan, I couldn’t agree more 🙂 When you do things you love with people you sincerely care about, great things will happen and it won’t matter if anyone else notices because you started with heart instead of reaching for fame.

  2. Thanks for this, Lorenzo. Your words just inspired and re-invigorated a lot of peeps. What would it take to get you to the office and recount this story in person? Would a case of Topo Chico do?

  3. I’m also a former Racker who can’t be more proud to cheer from the sidelines for Rackspace- a place I know to be the best professional alma mater.

  4. I agree with every point you made! We’d love to have you come back “home” and inspire the Rackers with your stories. Please say yes!

  5. It’s amazing how many local youth have had their lives changed by a career at Rackspace. Great message, Lorenzo.
    Homegrown teams and San Antonio go together well.
    BTW, I have to admit, I’ve turned off quite a few Spurs games after they were ahead by a lot. I’ve never thought Tim Duncan was boring.

  6. What a wonderful message and a truly great article. I find it remarkable how maligned this company is on WallSt presently. It seems so undeserved at this stage.

  7. Sing it Lo. That’s the thing. People who have never experienced the fire and drive of Rackspace, or got an email ticket at 5:30 (that they don’t read until 9:30) saying “Your server RAID array crashed last night. But we swapped out drives, rebuilt the array and got everything back up by 4”.. just don’t know. The cynical “Street” thinks think that Fanatical Support is just marketing fluff. All flash. They don’t realize it’s not even about technology. It’s about people. People who have your back. I’ve been told by customers that after that first fanatical save, they thought it was an awesome fluke.. then after the second.. and third save, then the truck hitting the data center.. we all doubled down and proactively saved our customer’s systems via mass automation. It’s only then that they are floored and realize they’re not just a customer. They realize that they’ve joined a band of brothers.. and that we actually got their back. That’s when they understand that they’re a part of our great mission. That’s why we have such a bond with our customers. And that’s why so many Rackspace customers BECOME Rackspace employees themselves. Rackers forever.

    Awesome piece Lo. Glad you wrote it. And by the way… there’s no such thing as an ex-Racker brother. 🙂

    Tweeks

  8. Great article Lorenzo! If every business could inspire employees and customers in the same way we’d all be better off. It’s a shame that fanatical support is the exception, and not the rule, in business, politics, education, religions, society, etc., etc., etc.

  9. Lorenzo, great write up. As another former racker I can say with confidence that you nailed it. Fanatical Support is real, and it will clearly become the differentiator Rackspace needs as the world enters the era of Managed Cloud.

  10. I appreciate Gomez enthusiasm on a company built on service fanaticism, its extraordinary people, and culture; however, as an investor, I need better understanding in reconciling how a severely underperforming stock over the past 18 months equates to the championship status accorded in this article. Any answers please? RAX fan…Not hater… O

  11. First of all, the comparison of Rackers to Marines was a little confusing since I worked alongside Marines and know there’s a big difference.

    Second of all, Rackers are spread out across the world and not solely based here in San Antonio. Most, if not all, of the Spurs can call San Antonio home.

    Third, from what I understand, there are no Rackspace datacenters here nor does there seem to be any focus on data center improvement here while Microsoft (Azure, one of RS competitors) is here working alongside UTSA to improve datacenters. Rackspace should be doing that but isn’t. 🙁

    Fourth, it looks like there is more of a focus on Austin then San Antonio. I noticed an article on the SAEN website about a facility on Austin’s Community College District space. That facility will rival anything San Antonio has as far as Rackspace/SA College partnerships are concerned. No, the SysAdmin training program doesn’t count.

    Lastly, the Spurs is a team that is held in high regard by most if not all of San Antonio’ residents and has won championships that have put us in the greater public’s consciousness. We are known for the Spurs as much as we are known for the Alamo. The achievements in the cloud sector on par with championships would probably be innovations and Rackspace has none of those.

    If we’re using stock performance as an indicator of business success then that would not work either.

    Rackspace has to innovate in this space (the cloud space). They have to do more. Marines literally throw themselves in the line of fire to accomplish a goal – if that’s what it takes – and move forward until the enemy is defeated. Rackers do not. In fact, rackers seem to be leaving rackspace to start their own companies none of which have anything to do with the parent company. At least throw up a cloud program that can be useful for and assimilated by the parent company.

    http://www.mysanantonio.com/news/local/article/Rackspace-pushing-Austin-expansion-5609628.php

    http://www.alamo.edu/newsDetail.aspx?id=28130

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