Rackspace Technology Aims to Double Revenue in India with Growing AI Adoption

Rackspace Technology, a leading global cloud computing company, aims to achieve a twofold increase in revenue growth within India over the next two years. This ambition comes amidst a rising adoption of artificial intelligence among local firms and a surge in demand for private cloud solutions in the third-largest economy in Asia. The company, headquartered in Texas, plans to further bolster its presence by setting up a data center within the country within the next one to two years, supplementing its existing network of 34 data centers worldwide.

Amar Maletira, the CEO of Rackspace, highlighted that India's rapidly expanding startup ecosystem, which is increasingly reliant on cloud technology, offers significant opportunities for growth. Additionally, the growing adoption of artificial intelligence among businesses is expected to generate new workloads, leading to an uptick in cloud spending. "India is one of our large markets and a market that we will focus on to grow," Maletira said. "Our focus in India will be helping customers in their digital transformation journey enabled by cloud and AI".

Established in 1998, Rackspace is a globally recognized multi-cloud and AI solutions provider, publicly traded on the Nasdaq. With a presence in nearly 100 countries, the company recorded approximately $3 billion in revenue for the fiscal year 2022. India hosts the largest portion of Rackspace's workforce, with around 40% of its 5,500 employees based in the country. In line with its commitment to advancing AI adoption, Rackspace launched the Foundry for AI by Rackspace (FAIR) initiative last year. As part of this initiative, the company has introduced proof-of-concept AI applications tailored for Indian clients in sectors such as retail and automotive. These initiatives assist clients in overcoming data-related challenges and facilitate the testing and implementation of AI solutions.

For public cloud services, the company has partnerships with Amazon Web Services, Microsoft Azure, and Google Cloud Services here. It partners with data centre companies like Equinix and DRT and will be working with companies like the L&T Group and Reliance Group to host its private cloud and offer managed services to customers, Maletira said. "There are legacy workloads that cannot be refactored or workloads that need data sovereignty which customers will move out of the data centres", Maletira said, adding that 30-40% of workloads globally are likely to move to private cloud environments.

According to Maletira, the Indian market is experiencing rapid growth at a "high double-digit" rate and represents approximately 5% of Rackspace's total revenues. Over the last two years, it has emerged as the fastest-growing market for Rackspace within the Asia Pacific and Japan (APJ) region. "When you look at the population of 1.4 billion, the consumption on the cloud is quite heavy. And there's a lot of innovation that's coming in within India", said Martin Dube, vice president – public cloud, APJ at Rackspace.

Dube further noted that Rackspace serves 142 clients in India, with significant growth observed in sectors such as manufacturing, particularly automotive and consumer packaged goods, as well as retail. Additionally, the company has established a customer base in the logistics and banking industries. "We have a presence in India, but people don't know Rackspace as much", Maletira said on brand recognition as it seeks to expand. "That is one of the challenges that we will overcome by driving thought leadership in the country".