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Rackspace Technology Survey Sheds Light on the Shifting Application Build vs. Buy Equation

November 19, 2020

Rackspace Technology Survey Sheds Light on the Shifting Application Build vs. Buy Equation

Rackspace Technology Survey Sheds Light on the Shifting Application Build vs. Buy Equation

SAN ANTONIO – November 19, 2020 – Rackspace Technology™ (NASDAQ: RXT), a leading end-to-end multicloud technology solutions company, announced the results of a new survey, “To Build or To Buy?,” which reveals that while the ratio of building vs buying applications has not changed, the way that customers assess whether to build or buy has changed.

Enterprises are consistently weighing the benefits and drawbacks of building their own solutions in-house or purchasing existing solutions to fit their individual needs. Over the past decade, this decision has been heavily driven by the accessibility and ease of each approach. Consequently, the build/buy equation has fluctuated back and forth, with organizational preferences leaning toward the method with the most accessible tools at the moment. The latest survey by Rackspace Technology takes a closer look at what the future of compute holds for the build/buy equation.

The key findings from the “To Build or To Buy?” survey by Rackspace Technology include the following highlights:

● The decision to build applications vs. buy applications is becoming more strategic — The research reveals that tech decision makers don’t plan to move strictly away from build and toward buy (or vice versa), but rather to shift in strategically choosing when to build and when to buy. For example, 72% of participants prioritize building customized applications for customer-facing purposes because it creates differentiation. With hiring and training skilled workers amongst the greatest business challenges today, it is essential that valuable developer hours be used to build applications that customers will notice and will eventually impact revenue. In fact, 67% of respondents agreed that digital transformation and the need for differentiation is driving the need to build applications in-house.

● In cases where organizations choose to build, adoption of low-code/no-code solutions will increase — The high preference for low-code/no-code solutions appears to continue the trend of “working smarter” even within the build approach, democratizing application development and allowing organizations to leverage user-friendly build tools to bridge the gap in developer skill sets. When building applications, 72% of participants said their organization uses low-code/no-code platforms and 86% said they are satisfied or extremely satisfied with low-code/no-code developments.

● In cases where organizations choose to buy, SaaS adoption will increase — SaaS products are rising in favor as they continue to become more robust in capabilities, highly customizable and easier to implement. Rackspace Technology’s research indicates a rise in SaaS as the preferred option when buying applications to enhance crucial but non-differentiating areas of business. Of survey respondents, 62% said ease of use and implementation is the main reason for buying software. Further, 65% of participants did say that with today’s SaaS advancements and customizations, it is possible to create differentiation in a pure SaaS world.

“When it comes to the buy vs build dilemma, rather than one approach dominating the other, our research and experience tell us that both methods have immense value if implemented for the right reasons,” said Jeff DeVerter, Chief Technology Officer – Solutions at Rackspace Technology. “It’s clear that right now the trend is to reserve developers and their build time for the highest impact work while filling in the gaps with purchased technology. We look forward to continuing to support organizations of all types as they navigate both sides of this equation.”

Download Rackspace Technology’s “To Build or To Buy?” white paper here.

About Rackspace Technology

Rackspace Technology is a leading end-to-end multicloud technology services company. We can design, build and operate our customers’ cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products and adopt innovative technologies.

Research Methodology

The survey was conducted by Coleman Parkes in September 2020 and targeted 1,870 CIOs, CTOs, COOs, IT Directors and other senior IT decision makers in the USA, LATAM, EMEA and APJ markets at organizations across a range of industries, including: technology, manufacturing, retail, media, financial services and the public sector.

About Rackspace Technology

Rackspace Technology® (NASDAQ: RXT) is the operator of the full enterprise AI stack from governed private cloud to AI inference and agents in production. With an Outcomes-as-a-Service model built on secure infrastructure, data foundations, and forward-deployed engineering, Rackspace delivers business results for regulated and mission-critical industries where governance, sovereignty, and uptime are non-negotiable. Learn more at www.rackspace.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events and can be identified by terminology such as “believe,” “may,” “will,” “potentially,” “estimate,” “continues,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect,” “is putting,” “designed to,” or the negative of such terms or other similar expressions, although not all forward-looking statements contain these words.

 These statements include, but are not limited to, Rackspace Technology’s relationship with NVIDIA and the NVIDIA Cloud Partner Program, its Enterprise AI Cloud strategy, the anticipated capabilities, benefits and timing of its Institutional Sovereign Pod architecture, Rackspace’s outlook on the AI industry and its ability to deliver, operate, and scale AI infrastructure and solutions for regulated, institutional and sovereign enterprises. Forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially, including, without limitation: Rackspace's ability to realize the anticipated benefits of its relationship with NVIDIA and the NCP program; the availability, cost, and timing of deployment of NVIDIA and other third-party technology; Rackspace's ability to develop, market, and scale the Institutional Sovereign Pod and related offerings on the anticipated timeline or at all; market acceptance of and demand for sovereign and governed AI infrastructure solutions; competition in the AI infrastructure and cloud services markets; capital expenditure requirements associated with AI infrastructure buildout; availability of financing for the AI infrastructure buildout on terms acceptable to Rackspace; Rackspace’s reliance on a limited number of technology partners, including NVIDIA; cybersecurity, data privacy, and regulatory compliance risks associated with serving regulated and sovereign customers; general economic and industry conditions; and other risks and uncertainties described in Rackspace's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Rackspace undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.