San Francisco Rolls Out Welcome Mat for Rackspace Hosting

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The explicit theme of the gala was “Small Teams, Big Impact,” as technology evangelist and Rackspace employee Robert Scoble himself hosted a series of webcast interviews with Rackspace executives, alongside representatives from local startups including New Relic, GoPro, Loggly and Foodspotting.

And while no announcements were made, exactly, and most of the conversations over the course of the evening were conducted at the absolute highest level, what I found most interesting was the discussion of why Rackspace decided to expand outside the Lone Star State.

In their conversation with Scoble, President of Cloud Lew Moorman and CTO John Engates said people originally thought Rackspace was crazy for trying to build a $1 billion hosting company outside of the San Francisco Bay Area. Crazier still, Rackspace’s San Antonio headquarters is literally a converted shopping mall it purchased and renovated.

But with expansion on the mind, it was time to head west. With 50 new software engineers already hired, and with Rackspace acquirees CloudKick and Anso Labs (the former provides cloud management, the latter originally developed the first version of OpenStack) officially relocated to the new space, it’s already bustling.

San Francisco Mayor Ed Lee even showed up to — no joke — declare Dec. 1, 2011, “Rackspace Day,” honoring the hosting provider’s commitment to growing its business in his city. Top IT talent comes to San Francisco for the Silicon Valley experience, and doesn’t leave because the city is such a destination, Lee said.

“Your customer support is fanatical,” Lee said. “In San Francisco, we’re fanatics.”

To my ears, the takeaway is that Silicon Valley’s cachet in the IT world may have shrunk just a little bit in recent years, but it’s still the place to be to grow a technology business. And when that technology business is the cloud, maybe that goes double.