Global hosting company Rackspace has performed a volte-face on its virtualisation position, and will be hosting virtual servers after all. It controversially said in August 2007 that virtualisation was not yet ready for the big time and wouldn't save money.

Its recently announced virtualisation initiative has started with a dedicated virtualised server offering. The company said: "Virtualisation is the newest service offering signalling Rackspace’s shift to IT hosting, transforming traditional IT functions into consumable services via the web. As more enterprises transition from purchasing in-house computing assets to leveraging service providers, Rackspace now offers a suite of hosted IT services that are more reliable and provide better value, including virtualisation, hosted mail, custom application support, back-end IT and storage."

This contrasts with Rackspace's statement six months ago that 87 percent of its customers said they would not share a server with other hosting customers. This prompted Rackspace to suggest that hosting providers offering virtual servers could be barking up the wrong tree, that virtualisation was not yet ready for the big time, and was unlikely to save its users money. Now the company says that a recent customer survey found that 51 percent were not willing to share a physical server with other virtualisation hosting customers, and only 13 percent were certain they were willing to share a physical server with other customers.

"Our product development approach focuses first and foremost on Fanatical Support readiness," said CTO John Engates. "We also ask 'Is the technology ready to use in a production environment?' We believe that our new virtualisation offering now meets these requirements and pushes the envelope, giving customers a virtualised environment ready for mission-critical applications, supported by our wealth of experience, expertise and Fanatical Support."

The company reckoned that it already nearly 300 virtual machines under its management, using the virtualisation infrastructure for internal IT operations as well as providing infrastructure for its spin-offs, Mosso cloud computing and Mailtrust hosted email. The company's also offering a server consolidation service.

Rackspace will use VMware’s Virtual Infrastructure 3 (VI3), whose benefits Rackspace described as "flexibility and scalability, as well as simplified infrastructure management with new data protection options and on-demand provisioning".

The offering will be based on dedicated physical hardware for each customer and will include the option of hybrid virtual and physical hosted environments.

Rackspace’s Engates added, "Virtualisation is still an evolving technology, and we believe this is just the beginning for Rackspace. Our RackLabs research and development department plans to continue to work with partners like VMware, Microsoft and XenSource to make generational leaps in the virtualisation hosting arena. We expect future releases of Rackspace Virtualisation Hosting to include enhanced disaster recovery, storage and scaling capabilities."