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

Its recently announced virtualization initiative has started with a dedicated virtualized server offering. The company said: "Virtualization 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 virtualization, hosted mail, custom application support, back-end IT and storage."

This contrasts with Rackspace's statement six months ago that 87% 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 virtualization 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% were not willing to share a physical server with other virtualization hosting customers, and only 13% 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 virtualization offering now meets these requirements and pushes the envelope, giving customers a virtualized 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 virtualization 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".