Rackspace has thrown in the towel on unmanaged cloud services. Feeling pressure from the big boys (Amazon, Google and Microsoft) and the much smaller but VC funded VPS providers (Digital Ocean and Linode to name but two) they have hunkered down on Managed-Only services for new accounts.

With the VPS providers steadily dropping price/memory to $10/GB/Month and Amazon also inexorably driving prices down, Rackspace has been squeezed in the middle and is clearly looking to differentiate around it’s ‘fanatical support’ mantra—starting at an additional $50/month for a $20 server. Whether this will work is an open question. Low cost users are typically not looking for support, just a low price, and larger organizations using AWS et al either do it themselves or use a cloud management provider such as RightScale.