Rackspace has had a tough couple of months, leading the company’s founder to predict “they’re on a trajectory of death.”
Rackspace Hosted Exchange experienced a security issue in December resulting in the company shutting the service down and recommending users switch to Microsoft 365. Weeks later, the situation was still not resolved, leaving Hosted Exchange offline.
According to the San Antonio Express-News, founder Richard Yoo says the company’s reputation “is eroding rapidly.”
“This is the beginning of the end,” Yoo said. “It’s already just a midsize business in San Antonio. This is not a company that’s on a trajectory of growth. They’re on a trajectory of death. It will not be around.”
Yoo believes much of the problem is the company’s current generation of managers and board members, none of whom are the kind of tech-oriented leaders the company once had. As a result, the company is now led by individuals “who don’t have any connection with the product.” He added that there’s “no culture.”
Yoo’s condemnation is certainly not going to help Rackspace as the company tries to recover from its recent issues. Only time will tell, however, if Yoo’s long-term assessment is correct.