In an on Tuesday, Mark Interrante, a Rackspace vice president, said the company will phase out the Slicehost virtual private hosting service and encourage customers to migrate to Rackspace. He did not say exactly when Slicehost would become unavailable, saying only that he wanted to start a dialog with customers about the transition over the next year.

In an interview, Interrante said that the company is investing more in the Rackspace cloud than in Slicehost. "There's more development on the Rackspace cloud from a feature perspective and growing the product. We want to get the best experience for our customers and the best experience is going to be on Rackspace," he said. For instance, he pointed to the new load balancer feature recently added to the Rackspace cloud.

In his email to customers, Interrante said maintaining the two services is inefficient. "With two brands, two control panels and two sets of Support, Engineering and Operations teams it has been a challenge to keep development parity between the products," he wrote.

In online forums, users complained that Rackspace would likely cost more, that customers would have to shoulder the burden of migrating to Rackspace, and that there are too many unanswered questions.

"They told us we might be hosed so come to the forums and discuss it. On the forums, they keep telling us they don't have answers," a user going by the name "jkoenin" . He expects most of the 22 "slices," or virtual servers, he uses on Slicehost will likely be easy to migrate to Rackspace. But he has never used Rackspace or evaluated the offering and is worried that he won't have the time necessary to investigate it.