Some cloud pundits believe Rackspace's move is a sign of broader changes in the market. The pure IaaS market is a race between Amazon, Google, Microsoft and IBM, says Mike Kavis of Cloud Technology Partners. Each of those companies has very deep pockets they're able to invest in research and development, new data centers and do so without the need to offer high-margin support services on top of it all. "Companies like Rackspace simply cannot compete in the never ending price reduction game and maintain the margins required to run a profitable business." Kavis says he "chuckles" at newcomers to the IaaS market who want to compete with those four behemoths of the industry.
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