What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-16 compared with 2022-03-01 · 34 added, 33 removed, 279 unchanged (19% of the section changed)

59 unchanged sentences

• automating much of the manual labor to reduce cost for our customers;

• providing our renowned Fanatical Customer Experience;

• providing our renowned Fanatical Experience for our customers;

• maintaining close relationships with the major cloud providers – AWS, Google Cloud, Microsoft Azure and VMware;

21 unchanged sentences

It ensures consistency in our customers’ experiences and allows our Rackers to automate key service and application management processes, freeing up resources to focus on strategic, high-value business opportunities.

This drives an efficient business model that has generated revenue per employee of over $375,000 for the year ended December 31, 2020 and over $450,000 for the year ended December 31, 2021, which we believe is ahead of our competitors and in-line with leading SaaS companies.

Cloud growth is accelerating.

Because of the factors discussed above, both small and medium sized businesses and large multinational enterprises alike will have to build and/or migrate some or all of their business to the cloud to stay competitive and reap the advantages that the cloud computing paradigm provides.

As a result, cloud growth has accelerated.

In 2020, the three hyperscalers recorded new cloud revenue of over $20 billion.

In 2021, this grew to $30 billion.

And in 2022, industry analysts expect the hyperscalers to recognize $40 billion of new cloud revenue - a 100% increase in just two years.

In addition, at its 2021 user conference, AWS, the leading cloud industry hyperscaler, stated that according to its analysts, only 5 to 15 percent of IT spending has moved to the cloud.

This would indicate that cloud adoption is still in the very early stages.

This drives an efficient business model that has generated revenue per employee of over $450,000 for the years ended December 31, 2021 and 2022, which we believe is ahead of our competitors and in-line with leading SaaS companies.

Our go-to-market and service-delivery strategy.

1 unchanged sentence

Our sales efforts are led primarily by a team of over 900 quota-bearing representatives and customer success managers.

Our ecosystem o f over 3,000 partners serves as an extension of our direct sales force, providing a source of additional new business opportunities.

Our ecosystem of partners serves as an extension of our direct sales force, providing a source of additional new business opportunities.

Our customer engagement model begins with our professional services, where we partner with a customer to assess its objectives and design the best cloud strategy to meet its needs, and continues with our flexible recurring service offerings.

3 unchanged sentences

Our success has been recognized by third parties and customers alike.

We served over 100,000 customers across 120 countries as of December 31, 2021, including more than half of the Fortune 100.

We served over 100,000 customers across 120 countries as of December 31, 2022.

We are recognized as a Leader in the 2020 Gartner Magic Quadrant for Public Cloud Infrastructure Professional and Managed Services, Worldwide, Forrester Leader in its 2020 report, Forrester Wave Multicloud Managed Services Providers, Q4 2020, IDC 2021 Worldwide Managed Multicloud Services Marketspace, and 2021 ISG Public Cloud and Private Hybrid Cloud Data Services/Solutions.

In addition, we have also received several industry partner awards including the 2020 Google Cloud Breakthrough North America Partner of the Year Award, 2021, AWS Migration Partner of the Year (US), 2021, Kubernetes on Microsoft Azure Advanced Specialization, and Virtual Desktop Advanced Specialization, 2021, VMware CloudHealth Global Partner of the Year, 2021, and Dell Technologies Global Alliances – Excellence in Expansion, EMEA Award 2021.

Additionally, as an AWS Partner Network (APN) Premier Consulting Partner, Rackspace Technology has achieved 15 AWS Partner competency designations.

In 2022 we received the following designations from ISG, a leading global technology research and advisory firm:

Provider Lens Leader in Cybersecurity - Solutions and Services Report, Provider Lens Leader in Google Cloud Partner Ecosystem Report, Provider Lens Leader in Microsoft Partner Ecosystem Report and Partner Lens Leader in Next-Gen Private/Hybrid Cloud - Data Center Services & Solutions.

Rackspace Technology’s predecessor company was founded in 1998, and was focused primarily on providing outsourced, dedicated IT infrastructure, primarily for small and mid-sized businesses.

14 unchanged sentences

We offer an integrated suite of managed services offerings across our private cloud, the leading public clouds and colocation.

Our managed cloud services help customers determine, manage and optimize the right infrastructure, platforms and services on which to deploy their applications to achieve the best performance, agility,

security and cost efficiency.

We also help customers establish governance, operational and architectural frameworks to mitigate risks and reduce inefficiencies, so they can manage costs, achieve industry-specific compliance objectives and improve security.

40 unchanged sentences

While we expect to continue to offer our OpenStack Public Cloud solution, we ceased to actively market it to customers in 2017.

Effective on January 1, 2023, Rackspace Technology reorganized around a two-business unit operating model, Public Cloud and Private Cloud.

Public Cloud and Private Cloud have very different business dynamics and require different skill sets and levels of investment to manage.

This two-business unit operating model ensures increased focus, delivery and service quality for our customers.

Beginning in 2023, Rackspace Technology will change its segment reporting to reflect this reorganization under three reporting segments:

Public Cloud, Private Cloud and OpenStack Public Cloud.

Our Technology Platform

Our technology platform is at the center of the Fanatical Customer Experience that we deliver to customers.

Our technology platform is at the center of the Fanatical Experience that we deliver to customers.

Our technologies focus on removing the complexities of multicloud deployments, unifying compelling aspects of the experience for our customers and enabling us to deliver scalable solutions.

13 unchanged sentences

These portals are unified with our custom framework and design language, Pilot and Helix, providing a consistent experience and integrated navigation between our product lines and features.

Our custom identity management system authenticates access to our user interfaces and APIs, handling over 2.6 billion requests per month.

Our custom identity management system authenticates access to our user interfaces and APIs.

This includes federation capabilities to integrate with our customers’ identity providers.

10 unchanged sentences

• identifying new areas with unmet needs and making smart technology bets to capture those opportunities ahead of the trend.

For example, new product offerings such as Rackspace Data Freedom and Managed Kubernetes introduced in 2021 claim previously-unfilled white space in the cloud market;

• igniting the Racker Culture of innovation and Fanatical Customer Experience for our customers and building on our unique culture by living our core values, embracing a growth mindset and operating with speed while celebrating accomplishments;

For example, new product offerings such as Rackspace Data Freedom and Managed Kubernetes introduced to claim previously-unfilled white space in the cloud market;

• igniting the Racker Culture of innovation and Fanatical Experience for our customers and building on our unique culture by living our core values, embracing a growth mindset and operating with speed while celebrating accomplishments;

• expanding automation to drive operational effectiveness and continuous process improvement for ourselves and our customers while remaining ahead of the competition in automation and building on our advantage.

65 unchanged sentences

We and our partners both receive critical inputs for further innovation and benefit from joint go-to-market initiatives, while our customers are able to maximize their use of innovative technologies more efficiently, reduce time-to-market and remain competitive.

Sales and Marketing

Sales and Delivery

Our services are sold via a global direct sales team of over 360 sales representatives and over 560 servic e delivery managers as of December 31, 2022, through third-party channel partners and through online orders on our website.

3 unchanged sentences

This is often the first step toward a long-term services agreement with a customer where we manage a customer’s cloud operations and give them the flexibility to evolve their spend with us as their needs change over time.

Our network of 3,000 channe l and technology partners as of December 31, 2021 also plays an important role in our sales efforts.

Our network of channe l and technology partners also plays an important role in our sales efforts.

Our channel partners - including management and technical consultancies, technology integrators, software application providers, value-added resellers and web developers - serve as a source of new business opportunities, primarily for small and medium-sized customers.

3 unchanged sentences

This team is responsible for understanding the existing customers’ changing business needs and translating them into IT requirements, resulting in successful project execution or alignment of our other service offerings.

At the heart of Fanatical Customer Experience is our unique culture.

At the heart of Fanatical Experience is our unique culture.

We invest in the recruitment, development and retention of our Rackers.

3 unchanged sentences

In our quest to hire the best talent, le ss than 2% of all a pplicants are offered positions.

We strive to ensure our employees are not just technical experts, but also obsessed with customer outcomes and delivering Fanatical Customer Experience.

We strive to ensure our employees are not just technical experts, but also obsessed with customer outcomes and delivering Fanatical Experience.

We offer Rackers various professional development opportunities through Rackspace University, along with award-winning onboarding and leadership development programs, enabling them to enhance their capabilities across technologies and further their professional growth.

Additionally, in 2022 we were recognized with several workplace-related awards:

Presented by:

Best Place to Work for LGBTQ (Plus+) Equality Human Rights Campaign Foundation

Mexico’s Best Workplaces for Diversity and Inclusion Great Place to Work

Best Place to Work for Moms Parents@Work

Best Place to Work for Dads Parents@Work

Best Place to Work for Parents Working Remotely Parents@Work

Top 50 Best Company for Latinas to Work Latina Style

50 Most Engaged Workplaces list.

Next Gen 100 List RippleMatch

• America's Most Loved Workplaces, published by Newsweek Magazine and the Best Practice Institute

• Top 50 Most Inspiring Workplaces – EMEA, published by Inspiring Workplaces

• Top 50 Most Inspiring Workplaces – North America, published by Inspiring Workplaces

• Top 50 Best Companies for Latinas to Work for in the U.S., published by Latina Style Magazine

• Best Places to Work for LGBTQ+ Equality, published by the Human Rights Campaign

• Company Culture & Mental Health Initiative, awarded by the SDC Awards

• Talent Management – Gold winner, awarded by Brandon Hall Group

• Talent Management – Silver winner, awarded by Brandon Hall Group

• Most Loved Workplaces-certified by Best Practice Institute

• Great Place to Work-certified by Great Place to Work Mexico

• Great Place to Work-certified by Great Place to Work India

• Best HR Teams, awarded by Comparably

• Best Companies to Work for Work-Life Balance, awarded by Comparably

Our Rackers are passionate about serving our communities as well.

Rackspace Technology provides 40 hours of paid time for each Racker to volunteer annually, with over 26,000 volunteer hours logged for the year ended December 31, 2021.

Rackspace Technology provides a minimum of 40 hours of paid time for each Racker to volunteer annually, with over 20,000 volunteer hours logged for the year ended December 31, 2022.

The Rackspace Foundation, a Racker-funded nonprofit organization, has been supporting underserved San Antonio-area schools through charitable grants since 2008.

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business