Rackspace is partnering with HPE on a new way of delivering private cloud managed services — they’re applying the pay-as-you-go model of the public cloud to a single-tenant private cloud environment.

The pay-as-you-go OpenStack private cloud, delivered as a managed service, will be generally available on or off-premise on November 28. It will be sold by Rackspace and HPE and delivered in partnership between the two companies.

The offering is targeted at large enterprises looking to handle bursting workloads, Rackspace’s Scott Crenshaw, EVP of private cloud, explained to ZDNet.

“When we go to an enterprise customer, they know what their baseline requirements are for capacity,” he explained. “So we put in infrastructure that is available to handle that baseline and then we add to it a large set of dark capacity… It’s there, it’s available, but they don’t pay for it until it’s turned on.”

The offering merges HPE’s expertise in hardware, servers, storage and the surrounding financing, Crenshaw said, with Rackspace’s experience in private cloud management. That combination, he said, makes the aggregated cost of this new pay-as-you-go private cloud offering less expensive than public cloud.

The cost of the new service will vary dramatically based on the requirements of the customer, Crenshaw said. However, after comparing the costs of their new service to Amazon Web Services’ public cloud costs, Rackspace says its price points are typically 40 percent less per gigabyte hour or per VM hour than the three-year reserved prices offered by AWS.

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