Rackspace is now the roach motel of cloud platforms

Ever since its layoffs last summer and a plunge in quality, Rackspace lets customers in — but won’t let them out. A cautionary tale of a business that had to fight like heck to escape.

hand holding paper cloud for RackSpace logo

I have been a longtime fan of Rackspace as a cloud platform. Indeed, I strongly recommended them for their excellent security and, particularly, for their superb customer service and technical support. 

At its height (which included the first half of 2021), tech support staff would answer the phone within a minute, overwhelmingly be helpful, informed, and almost always take the time to review any notes from earlier tech calls (and leave detailed notes for any follow-ups). Indeed, when one of our sites was hit by an especially aggressive and persistent DDOS attack, it immediately put multiple teams on the problem and added additional software until the attack was resolved three days later.

But that all changed in the second half of last year, after the company announced a large layoff. Within a month, tech support and customer service quality plunged. There were issues in multiple departments. Support staff — assuming you could hold on long enough to reach someone — didn’t listen to what was going on, never reviewed earlier notes (assuming there were any) and seemed to barely understand their own services.

(During a security incident, I asked one tech support person if I could talk with someone in security. He said Rackspace didn’t have a security department, which was quite a surprise to the Rackspace security staffer I later talked to.) 

What finally set me off, however, was a 3 a.m. email change that deleted tens of thousands of company emails. As bad as that was, I would have written it off had the company given me explicit details about what and how it had happened. But no meaningful details were shared, no apology offered. So I decided to leave Rackspace and move to a different cloud platform (Pair, which delivered the excellent tech support Rackspace used to offer — and they cost a lot less).

Alas, my decision to leave is not where the story ends. That’s when I realized I was trapped in a cloud roach motel: users could check in, but it was all but impossible to check out. Technically, Rackspace eventually let the account close, but it kept billing me. (I kind of wanted the account closing to mean billing would stop.)

Welcome to the new Rackspace. Here's how things unfolded.

Step One: I evaluated and locked down a new cloud site and began the lengthy process of transferring all files, updating DNS settings and whatnot and began testing and retesting. Once everything checked out, I deleted everything on Rackspace. This seemed to be the safest route.

Step Two: I contacted Rackspace, told them I was leaving and asked for a final bill and a shutdown of my account. In response, I was told they would send my “request” to a group that deals with such matters and they'd let me know more in a couple of weeks.

I have no idea if this is what Rackspace told its people to say or if the person I spoke with was making stuff up. Either way, it was bizarre. It’s like firing an employee and being told, “I’ll consider your termination and let you know if I approve in a couple of weeks.” Or trying to break up with someone and being told, “You want to break up with me? I decline. But I’ll think it over and get back to you.” 

I asked whether they could stop billing me — and shut down my account — while they decided. Nope. I then said I would pay the final bill via a credit card and told them not to withdraw directly from my bank account anymore. They agreed.

Being suspicious, I paid a fee to my bank to block any future withdrawals. Sure enough, over the next several months, Rackspace tried withdrawing money seven times.

More weeks went by. More bills. More phone calls. I started getting overdue notices and it became clear that they had opted to not charge the credit card while repeatedly tried charging the bank account. After several more frustrating calls, I finally got through to someone in billing who again took my credit card details. (This time, they actually charged it.)

Then I started receiving more overdue bill notices. I called and spoke with someone else in Billing and they said they would call back by the end of the day. No one called. What a shocker.

I thought I was done. I was not. 

Things got even more surreal. I called Rackspace, asked to again be transferred to billing or accounts receivable — and wound up in a conversation right out of "Catch-22."

“It looks like that account has been closed," I was told.

“Absolutely," I replied. "It should have been closed months ago, but it’s good to hear that it finally happened in the system. May I please be transferred to billing?”

“I need to authenticate you first.”

“OK. No problem.”

“But I can’t authenticate you because the account is closed. The system won’t let me do it.”

She wouldn’t transfer me, even though someone in her role had indeed transferred me the day before — so I asked for a supervisor who was very professional and nice — but he wouldn’t transfer me to billing, either. Because he couldn’t authenticate me.

I suggested someone from billing call me and offered to give him my phone number. He couldn't take it — based again on the lack of authentication. Fair enough, I said, but the account was 15 years old, so I wanted to make sure the number was still valid. He declined to tell that to me. I surrendered. 

When I did hear back from someone, they wouldn’t tell me what the additional charges were for. (I then reached someone in Rackspace corporate for help closing the account; that finally worked. And no, they didn’t comment on the troubles I ran into.)

The point of all of this? To remind enterprise IT to get your lawyers to focus on exit clauses, with penalties for unwarranted delays, when you negotiate your next tech agreement, whether it's a cloud provider or some other IT service.

What kinds of clauses should they try for? I’ll cover that in my next post.

Copyright © 2022 IDG Communications, Inc.

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