Rackspace was never the most affordable; their differentiator was service. Digital Ocean had very little to do with their decline.

The biggest factor was the shift in corporate mindset from “we need to operate our own servers” to “we need to orchestrate services running on someone else’s servers.” Probably AWS is most to blame for that.

Rackspace tried to make the jump across that chasm several times but they were trapped on the wrong side of the Innovators Dilemma. All their existing customers expected (expensive) full phone support. And new customers who wanted automated cloud systems with minimal support did not look to Rackspace for that.

Eventually they leaned entirely toward service and started reselling and supporting all the major cloud platforms. I would bet that is the majority of their revenue today. Any hosting they do should be considered a legacy business.

> Digital Ocean had very little to do with their decline.

From my personal experience, Digital Ocean did pull away a lot of indie devs and small businesses away from Rackspace. Those folks did not need most of the features of AWS. They just needed simple cloud servers and maybe some load balancers.

My own small business used Rackspace in 2010 to 2013 ($5k per month op cost). When DO came to our radar, it was dead simple to switch to and cut the cost almost by half.

Another thing I remember about DO was their abundance of community articles (HowTo's and server setup tips, etc...) that were well-maintained and always kept up-to-date with latest linux distros.

Digital Ocean was just too late and too small to carry much blame for Rackspace’s decline in hosting. Even as recently as 2021, DO revenue was $120 million vs almost $3 billion at Rackspace.

Play around with various hosting company names in Google Trends if you want to see how interest changed over time.

I’m not saying DO is bad, far from it. But it’s more accurate to say that they benefited from trends that were well underway before they had significant market presence.

I feel AWS ate Rackspace's lunch.

Rackspace were never part of the affordable hosting segment.

I think DigitalOcean ate the shared PHP hosters' lunch.

They bought and then shuttered Slicehost in an attempt to occupy that market segment.

DataPipe (another company where tech support was the #1 priority) was also acquired by Rackspace. However I don't know if it was acquired by the original owners or the current org.

That deal was announced in September 2017 and closed in November, so Rackspace was already in the clutches of Apollo by then.

Onica too, which I don't know a whole lot about but my impression is that they were the top tier of cloud consultants.

slicehost wasn't shuttered so much as rebranded. rackspace didn't have a viable vm service prior to slicehost.