What if cloud infrastructure wasn’t just a resource, but a marketplace? What if developers and businesses had the power to bid for compute capacity, transparently, at real market prices—free of vendor lock-in or cloud markups? That’s the vision behind Rackspace Spot. And if that sounds ambitious, it is. But it's also very real.
In a recent podcast, Sharna Parkey of Open Source Data sat down with me to discuss this first-of-its-kind service that is democratizing cloud infrastructure.
Rackspace Spot introduces an open and transparent auction marketplace for cloud servers. The core idea was to challenge the traditional, fixed-pricing model for cloud resources. Our hypothesis was simple: could compute be treated like a commodity? Could you buy, sell, and trade it like any other resource?
The Problem: Cloud Complexity & Overpricing
Today’s cloud landscape is dominated by large providers offering pre-packaged services at opaque prices. Compute, storage, networking—everything is bundled into high-margin offerings that limit flexibility and drive up costs.
Rackspace Spot was built to challenge this paradigm—and it's doing just that.
Enter Rackspace Spot: Infrastructure as a Market
At its core, Rackspace Spot is a cloud-native, OpenStack-powered infrastructure platform with a game-changing feature: an auction-based pricing model for compute resources.
Users place bids for virtual machines (including GPU-based workloads), and the system provisions instances when those bids match available capacity. No long-term commitments. No inflated rates. Just real infrastructure, priced in real time.
How Does It Work?
Instead of paying a predetermined price for a set amount of virtual CPUs, RAM, and disk space, Rackspace Spot allows the market to dictate the value. This means the price of a server is based on real-time supply and demand.
I highlighted a fascinating possibility: a 2V CPU, 2 GB RAM, 10 GB disk could, in fact, be more expensive than 128 GB RAM, 124-core disk—because nobody’s using the bigger one.
This new model has been met with enthusiasm, with thousands of instances now running on the Spot marketplace since its launch in early 2024. The service is expanding across Rackspace's various regions and now includes both CPU and powerful GPU compute options, all accessible through the same consistent API.
Overcoming the Cognitive Barrier
While the concept might seem unpredictable to a CFO, the barrier to adoption is more cognitive than technical. Even if a user overbids significantly, they can still achieve substantial savings compared to competitors' costs because the price slides with the market.
You could set your bid and still save money while ensuring your workload remains persistent. For anyone familiar with trading on the stock market, the concept is intuitive.
Transparent, Open & Honest
The Rackspace Spot model isn’t just about saving money (though it does that too—customers report up to 80–90% savings compared to AWS and others). It’s about restoring trust:
- You see your bid.
- You know the cutoff price.
- You can opt into or out of provisioning based on market behavior.
- You’re not locked into proprietary platforms or unpredictable billing models.
It’s compute as it should be—visible, logical, and fair.
Features That Matter
Rackspace Spot doesn’t overload you with configuration panels. It delivers:
- Simple signup via GitHub, Google, or email
- Clean, usable console UX focused on what matters
- Lifecycle visibility for clusters and nodes
- Spot instance flexibility with bid-based auto-scaling
- Kubernetes-native services with clean CNI, CSI, IAM, and GPU integration out-of-the-box
Want a GPU instance with fractional MIG support? It’s there. Want to deploy 10 Kubernetes nodes using your own scaling policy? Done.
Why This Matters
We’re in a cloud economy increasingly dominated by large players setting arbitrary pricing, abstracting away control, and discouraging portability.
Rackspace Spot challenges that paradigm.
It treats infrastructure like the commodity it is, encourages smarter resource consumption, and gives users the keys to their own infrastructure strategy.
It’s a return to the promise of cloud—not just scalable, but accessible, economical, and open.
Built on OpenStack. Optimized for the Future.
Rackspace’s legacy in OpenStack isn’t just historical—it’s foundational. Spot’s architecture leverages OpenStack as the control plane, with Kubernetes as the core platform, creating a flexible infrastructure layer that supports innovation far beyond traditional VM provisioning.
From ML workloads to burst compute clusters, from early-stage startups to enterprise tech teams, Rackspace Spot is built to serve a wide range of use cases—without compromise.
We’re not trying to be another AWS. We’re not trying to replace Azure or copy GCP. We’re trying to offer something those providers can’t or won’t: an honest cloud, built by engineers who understand what it means to run real systems, at real scale, with real constraints.
And that may be the most radical thing in cloud computing today.
