Rackspace announced the hire of a new CEO on Wednesday, the latest in a series of overhauls at the San Antonio managed hosting provider.
Kevin M. Jones, who last led the Dallas-based transportation contractor MV Transportation, will succeed Joe Eazor, who took over at Rackspace less than two years ago, replacing Taylor Rhodes, who resigned in May 2017 after 10 years with the company. Eazor led Rackspace through a period of transition, after the company was purchased by the New York-based private equity firm Apollo Global Management.
The tech company, which is headquartered in the municipality of Windcrest, has also undergone three rounds of layoffs – the most recent coming in February when the Rackspace workforce contracted by 3 percent – since going private, as well as a voluntary exodus of many longtime Rackers who joined the enterprise in its startup days. Turnover has also pervaded the company’s executive levels, with more than a dozen executive appointments during Eazor’s tenure. Even the Rackspace branding got a facelift – adopting a bolder red and a lowercase “r” as its logo.
“I’m thrilled to welcome Kevin as the CEO of Rackspace,” said David Sambur, senior partner at Apollo Global Management and chairman of the Rackspace board of directors, in a press release. “He has an outstanding track record of leading and transforming businesses by inspiring organizations to increase revenue, profitability, market share, customer satisfaction, and employee engagement.
Sambur credited Eazor with leading Rackspace through three acquisitions and strengthening the company’s finances.
“The company is financially stronger than ever and on track in achieving its near and long-term goals,” he said in the release. “We thank Joe for his leadership in getting Rackspace to this point, and we wish him the best in his future endeavors.”
In an interview with the Rivard Report last month, Eazor said the company has always been profitable but has recently improved its cash flow by investing its capital in the correct areas. Rackspace began its business building physical web servers for businesses. The company still maintains dozens of data centers around the globe, spanning four continents, but its business largely centers today on managing clients’ cloud infrastructure. It’s more of a technical support provider than a hardware builder.
Rackspace’s transition has gone well under Eazor’s watch, said Craig Lowery, vice president at the IT analyst firm Gartner.
“Everything we hear about Rackspace is very positive,” Lowery said. “They are delivering on their stated goals to become a multi-cloud managed service provider.”
But a change at the top does not necessarily portend an imminent initial public offering, as has been speculated. Jones has also never helmed a company while it made a leap into the public market. Despite its recent success and Eazor’s ability to garner more enterprise-level customers – which Rackspace will need to survive in the hypercompetitive market – the leadership swap is likely a combination of “fine tuning and acceleration,” Lowery said.
“If I’m reading the tea leaves, I bet the investors want them to grow faster,” he said. “There are lots of ways you could read this.”
Jones, who held leadership roles at such tech companies as Hewlett Packard and Dell before joining MV, is noted for having turned around the transportation company’s financial, sales, safety, and employee engagement performance, according to the release.
“I am very excited to join Rackspace and its incredible leadership team,” Jones said in the release. “I have always admired Rackers’ passion for providing customers with an unparalleled experience. Rackspace has an industry-leading growth strategy as it continues to partner with customers on their digital transformation journey, and I look forward to working with the team as we help customers accelerate the value of the cloud.”
Reached by email Wednesday, a Rackspace spokeswoman said the company would not provide further comment. Eazor did not respond to a text Wednesday morning. An interview request to representatives of Apollo Global Management was pending as of publication time.