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Chronicles

The story behind the story

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RackSpace Outage Hits Home

A truck driver drove into a power transformer in San Antonio, Texas, causing it to explode.  That explosion caused major power disruption and took down RackSpace, our hosting company.  This is second time in less than a week they have had power issues.

GigaOM Om Malik

Context & Ripple Effects

This lands one day after Laughing Squid reported a massive power outage at Rackspace's Dallas data center, making two power-related failures at the hosting company inside a week. The pickup pattern shows how far the story travelled for an infrastructure blip: Valleywag framed it around the consumer sites knocked offline, and 37signals used its product blog to explain downtime to its own application customers — evidence that Rackspace's failures cascade straight into other companies' customer communications.

First-order effects

  • Rackspace customers, including hosted-application firms like 37signals that had to publish their own downtime explanations, absorb a second outage in under a week and the support burden that comes with it.
  • Rackspace takes a direct hit to its core sales pitch — reliability — at the moment competitors can cite two distinct power failures in two Texas facilities within days of each other.

Second-order effects

  • Hosting buyers reassess single-facility dependence, pushing demand toward providers with geographically separated redundancy and pressuring Rackspace to justify premium pricing on availability guarantees.
  • Rivals in the managed-hosting market gain a ready-made competitive talking point without spending anything: every Rackspace outage is free differentiation for anyone promising redundant power.

Third-order effects

  • The episode underscores that grid-level events — here a truck striking a San Antonio transformer — are the failure mode no data-center UPS fully insures against, making multi-site distribution a structural requirement for any provider hosting consumer-facing web applications.
  • If concentrated hosting keeps producing visible cascades, uptime disclosures shift from vendor marketing claims toward independently verifiable status reporting that downstream application providers can point their own users to.

The trend: As more consumer web services concentrate on a handful of hosting providers, physical power infrastructure becomes the binding constraint on reliability, and geographic redundancy turns from differentiator into table stakes.