What changed in this filing

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Item 1. Business

2025-03-21 compared with 2024-03-15 · 33 added, 37 removed, 272 unchanged (20% of the section changed)

ITEM 1 – BUSINESS

Rackspace Technology is a leading end-to-end, hybrid, multicloud and AI solutions company.

Rackspace Technology is a leading end-to-end, hybrid cloud and AI solutions company.

We design, build, and operate our customers’ cloud environments across all major technology platforms, irrespective of technology stack or deployment model.

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• The emergence of cloud-based business tools, such as data analytics, machine learning and AI, that help companies optimize business performance.

• A global pandemic that challenged companies to accommodate an increasingly remote workforce.

In addition, the cost to maintain a company-owned data center (known in industry parlance as “on-premises” or “on-prem” data centers) has become cost prohibitive since companies must constantly upgrade hardware, maintain physical infrastructure and constantly apply security patches to counteract emerging security threats.

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As a result of these developments, most companies will become increasingly dependent on cloud technologies for most of their new workloads, as well as a portion of existing workloads, over the coming years.

The multicloud paradigm brings additional complexity for businesses moving to the cloud.

The recent growth of GenAI is fueling demand for increased compute, storage, and connectivity.

We anticipate this secular trend to continue for the foreseeable future.

The industry is rapidly evolving its solutions to accelerate AI in the enterprise.

The hybrid cloud paradigm brings additional complexity for businesses moving to the cloud.

Moving to the cloud is not as simple as selecting a single platform and migrating data.

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• Data egress fees (fees charged by the hyperscalers for moving data out of their storage environment) have highlighted the need to keep frequently-accessed data on non-hyperscaler platforms.

As a result, businesses quickly find themselves in a multicloud paradigm that includes two or more hyperscaler platforms, private cloud and data and applications that are hosted on-premises or in a colocation or managed hosting facility.

In such a complex environment, even the most sophisticated IT organizations at the largest multinational companies require outside resources to manage their multicloud strategy.

Rackspace Technology is a leading pure-play hybrid, multicloud and AI solutions company.

As a result, businesses quickly find themselves in a hybrid cloud paradigm that includes two or more hyperscaler platforms, private cloud and data and applications that are hosted on-premises or in a colocation or managed hosting facility.

In such a complex environment, even the most sophisticated IT organizations at the largest multinational companies require outside resources to manage their hybrid cloud strategy.

Rackspace Technology is a leading hybrid cloud and AI solutions company.

We help companies of all sizes manage their transition to the cloud, make sense of their IT infrastructure, migrate their data to the cloud, optimize their cloud presence on an ongoing basis, accelerate the responsible adoption of AI and manage the workloads best left to managed hosting or other mature platforms.

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• modernize their legacy business applications so they are optimized to run in the cloud;

• modernize their data systems to be ready for advanced analytics and AI;

• accelerate the responsible adoption of AI in their organization;

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We differentiate ourselves from other service providers by:

• focusing solely on the cloud as the only pure play cloud solutions company;

• focusing solely on the cloud as the only pure play hybrid cloud solutions company;

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

• providing our renowned Fanatical Experience for our customers;

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

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

• providing a full suite of cloud services across public and private cloud, as well as managed hosting and colocation services, so that enterprises can cost-effectively maintain legacy applications that are not cloud-ready while migrating their business to the cloud gradually;

• providing services that span the life cycle of transformation from Day 0 - Strategy, Day 1 – Transformation, and Day 2 – Run Operations.

We have a culture of innovation that permeates all that we do.

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This is in direct contrast to our competition, many of whom charge for their services on a markup over labor costs, and therefore are not incentivized to employ automation in order to reduce customer costs.

Approximately 75% of our workloads are automated today, an industry leading figure that increased dramatically in recent years.

We continually strive to optimize our automation to drive further efficiency gains in our business.

Rackspace Fabric includes automation that ranges from service delivery to self-healing infrastructure, giving us the ability to anticipate and proactively respond to opportunities and threats.

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 $450,000 for the year ended December 31, 2022 and over $500,000 for the year ended December 31, 2023, which we believe is ahead of our competitors and in-line with leading SaaS companies.

This drives an efficient business model that has generated revenue per employee of over $500,000 for the years ended December 31, 2023 and 2024, which we believe is ahead of our competitors and in-line with leading SaaS companies.

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

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We served over 81,000 customers across 120 countries as of December 31, 2024.

We are recognized in leading analyst firm reports, including the Gartner Magic Quadrant and Critical Capabilities for Public Cloud IT Transformation Services, the Forrester Wave:

Multicloud Managed Services Providers, IDC Worldwide Managed Multicloud Services Marketscape, IDC Worldwide Managed Public Cloud Services Marketscape and multiple ISG Provider Lens reports focused on Public Cloud and Private/Hybrid Cloud and Data Center Solutions.

We are recognized in leading analyst firm reports, including the Gartner Magic Quadrant and Critical Capabilities for Public Cloud IT Transformation Services, IDC Marketscape:

Worldwide Cloud Professional Services Vendor Assessment, IDC Marketscape:

Middle East and Africa Cloud Professional Services Vendor Assessment, PeMa Quadrant:

Gen AI Services Providers, and multiple ISG Provider Lens reports focused on Public Cloud and Private/Hybrid Cloud and Data Center Solutions.

In 2024 we received the following Provider Lens Leader designations for reports by ISG, a leading global technology research and advisory firm:

Multi Public Cloud Services and Solutions, Cybersecurity Solutions and Services, Google Cloud Partner Ecosystem, AWS Partner Ecosystem, Microsoft Partner Ecosystem and Private/Hybrid Cloud - Data Center Services.

In addition, we have also received several industry partner awards including being awarded 3x Partner of the Year for Google- 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.

In addition, we have also received several industry partner awards including being awarded 3x Partner of the Year for Google- including the 2020 Google Cloud Breakthrough North America Partner of the Year Award, 2021, AWS Migration Partner of the Year (US), 2021, VMware CloudHealth Global Partner of the Year, 2021, and Dell Technologies Global Alliances – Excellence in Expansion, EMEA Award 2021.

In 2023 we received several industry partner awards including AWS SI Partner of the Year - NAMER, AWS Sustainability Partner of the Year - NAMER and AWS Education Partner of the Year – EMEA and VMware 2023 Lifecycle Services Award for the Americas Region, Dell Technologies Excellence in Server and Storage Sales, Americas and 2023 Microsoft Partner of the Year Azure Intelligent Data Platform, Data & AI- Singapore.

In 2024, we were recognized as a strategic partner with Microsoft in Data & AI, and a Ready-Tier partner for Copilot Jumpstart.

We achieved the AWS Small and Medium Business Competency and AWS Generative AI Competency and joined the AWS Generative AI Partner Innovation Alliance as a launch partner.

We also received the Dell Technologies Global Alliances Service Provider of the Year, Americas.

In addition, we received the Sustainability Impact Award from SustainableIT.org.

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.

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Today, we are a trusted partner to the global cloud ecosystem.

We maintain close relationships with major cloud infrastructure and application vendors, enabling us to provide our customers with complete, unbiased hybrid and multicloud services, all through our single customer interface.

We maintain close relationships with major cloud infrastructure and application vendors, enabling us to provide our customers with complete, unbiased hybrid cloud services, all through our single customer interface.

Our Integrated Services Portfolio

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FAIR Industrialize is a systematic effort to transform the AI solution into a product, implementing governance, defining metrics, and optimizing the AI model and Distributed Cloud Infrastructure for continuous improvement.

We offer professional services across our entire portfolio, including hybrid, multicloud solutions, applications, security and data.

We offer professional services across our entire portfolio, including hybrid solutions, AI, applications, security and data.

As part of our professional services process, we meet customers at every stage of their cloud journey and design solutions focused on modernizing their infrastructure and applications to enhance the value of their cloud technologies.

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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.

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

• Innovative automation drives efficiency for us and our customers, enabling us to rapidly and consistently deliver our solutions across m ultiple products and clouds at scale.

Rackspace Business Automation is a custom platform developed to handle over 12 million events and over 1 billion actions per month across physical devices, virtual devices, systems and tools.

Data center automation provides services and applications to automate provisioning, configuring and the decommissioning of data center infrastructure.

UIPath Robotic Process Automation is deployed across our business to automate repetitive tasks.

We can aut omate 75% of cus tomer support workloads based upon the automation of thousands of unique processes across our support organization.

• AIOps is a new field of software that combines monitoring, machine learning and automation to enhance IT operations.

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• Self-service APIs enable our customers to access data and resources programmatically, extending our automation and service delivery into their native tools and processes.

We support integration with our ticketing systems to enable two-way integrated support workflows and billing system integration to enable access to consolidated billing data in multicloud environments.

Additionally, our pre-built int egration with ServiceNow enables enterprise customers to simplify connectivity between our tools and ServiceNow.

• MyRackspace and other portals and associated mobile apps service over 550,000 active monthly users and support product specific self-service, insights, account management, security management, ticketing and billing.

• Rackspace Technology digital web portals service over 500,000 active monthly users and support product specific self-service, insights, account management, security management, ticketing and billing.

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.

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

• Unified billing enables us to deliver an integrated single invoice for customers across all multicloud deployments.

• Unified billing enables us to deliver an integrated single invoice for customers across all cloud deployments.

Our systems extract and rerate bills from public cloud hyperscalers and merge data from our products and services to generate a single invoice each month, while applying sophisticated billing and discount models.

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• 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;

• focusing on a holistic strategy enabling optionality for our customers on their AI journey through innovative services and solutions and supporting inferencing and fine-tuning workloads with hybrid AI infrastructure.

Additionally, we are implementing AI to enhance cloud optimization and management, incorporating AI into our operations and business, driving AI powered insights.

Our Competition

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• In-house IT departments of our customers and potential customers provide services for their respective organizations, but typically need help scaling large technology environments and maximizing the value from their cloud investments, especially when speed, cost and innovation are key constraints.

• Traditional global IT systems integrators , such as Accenture, Atos, Capgemini, Cognizant, Deloitte, DXC Technology and IBM, offer consulting and outsourcing, in a labor-intensive model, for large enterprise customers.

• Traditional global IT systems integrators , such as Accenture, Atos, Capgemini, Cognizant, Deloitte, DXC Technology and Kyndryl, offer consulting and outsourcing, in a labor-intensive model, for large enterprise customers.

Many of these businesses largely support legacy technologies and, where cloud capabilities exist, legacy revenue streams disincentivize these companies from fully embracing cloud technologies.

• Cloud service providers and digital systems integrators provide either consultation and implementation services for digital workflows or cloud services for a single cloud vendor.

The solutions offered by these companies are often narrow in scope and are not well-suited for companies with complex hybrid, multicloud objectives.

The solutions offered by these companies are often narrow in scope and are not well-suited for companies with complex hybrid cloud objectives.

• Regional managed services providers use a local go-to-market approach, and provide cloud services within a single region or few regions.

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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 2023 we were recognized with several workplace-related awards:

• #1 Most Inspiring Workplace – Global, published by Inspiring Workplaces

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

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

• Top 10 Most Inspiring Workplaces – Australasia, published by Inspiring Workplace

• Achievers 50 Most Engaged Workplaces, published by Achievers Workforce Institute

• Best Places to Work for Women, published by Great Place to Work Institute – Mexico

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

• Tech Cares Awardee, published by Trust Radius

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

• Corporate University Team of the Year Finalist, published by Corporate Learning Network

Our Rackers are passionate about serving our communities as well.

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Our Employees

As of December 31, 2023, we employed approximately 5,800 Rackers in 22 countries, including 2,300 Rackers in North America, 1,000 Rackers in EMEA, 2,400 in APJ and 100 Rackers in Australia and New Zealand.

As of December 31, 2024, we employed approximately 5,100 Rackers in 23 countries, including 1,900 Rackers in North America, 900 Rackers in EMEA, and 2,300 Rackers in APJ.

Of our North American Rackers, approximately 400 work from our corporate headquarters in San Antonio, Texas.

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Our website and the information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report.

In addition, we will provide electronic or paper copies of our filings free of charge upon request.

The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.

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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