Kevin Jones Out as Rackspace CEO

Kevin Jones is out as Rackspace CEO.

Rackspace’s Almar Maletira

On Monday, the Texas-based cloud computing managed service provider said Amar Maletira, president and chief financial officer since November 2020, now serves as head of the company.

Apollo Global Management’s Kevin Jones

Jones held the Rackspace CEO role for almost four years. As of Sept. 26, he is working as an operating advisor with Apollo Global Management, which bought Rackspace in 2016 for $4.3 billion and took the company public once again in 2020. Given Rackspace’s ups and downs over the past year under Jones’ leadership, the powers that be apparently determined it was time for a change.

“Amar brings broad management and leadership experience, and over the course of his career, he has helped transform several multibillion-dollar technology businesses,” said David Sambur. Sambur acts as co-head of private equity at Apollo Global Management and as chairman of the Rackspace board.

“[Amar] has also been instrumental in crafting Rackspace Technology’s new strategic direction and operating model,” Sambur added. “We believe his appointment as CEO will allow us to improve and accelerate the execution of our new go-forward strategy.”

What that new strategy is, exactly, remains a bit of a mystery. Rackspace was supposed to meet with analysts this month and shed some light on the company’s plans. That hasn’t happened yet and such an event is not listed on Rackspace’s website.

A Realignment Starts with a New Rackspace CEO

Rackspace has waffled this year in terms of its market approach as its earnings lose investor faith. In May, Jones indicated the company would sell itself, but in pieces rather than as a whole. Public cloud was looking more lucrative for Rackspace than private cloud, so all signs pointed to the latter being jettisoned. Then, in August, Rackspace backpedaled. Executives called off sale intentions and Jones, on the company’s second-quarter earnings call, said, “[W]e’re excited about this organization into two business units. We see really strong demand on the … public cloud side of things and also strong demand on the private cloud side of things.”

Maletira — CFO at the time — agreed.

“[W]e look forward to sharing more details on the financial profile of both the public cloud and private cloud businesses,” he said on the same call. “And currently, we are deep into the detailed planning of this realignment that Kevin talked about and we’ll begin in the early stages of implementation of the new operating model in our fiscal Q3.”

Part of that realignment, of course, appears to have started at the top, with Jones’ exit as Rackspace CEO. Maletira, for his part, brings a record of steering company turnarounds. He did just that at Viavi Solutions, an Arizona-based technology firm. Regarding Rackspace, Maletira said he is “very excited about the journey ahead and look forward to leading the company as we transition to our new strategy and operating model.”

Maletira also will stay on as CFO until Rackspace names a permanent replacement.

What Will Rackspace’s Next Move Look Like?

Shares of Rackspace had dropped almost 9% by about 3 p.m. Eastern on Monday on news of the executive shuffle.

Rackspace has struggled to define itself in a crowded market. A veteran of corporate reorganizations, the company once more faces decisions about how to best compete as organizations seek help with digital transformation. As cloud computing emerged to dominate the tech space, Rackspace repositioned itself as a rival to Amazon Web Services, Microsoft Azure and Google Cloud. But it couldn’t quite keep pace with those firms, so it switched to a managed service provider model. Now, Rackspace ranks as a top partner for the hyperscalers, even as it tries to determine its footing.

Channel Futures has reached out to Rackspace’s public relations team with an inquiry about whether Maletira’s appointment will impact indirect channel partners.