diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/nova-agent-watcher/nova-agent-watcher-0.0.1.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/nova-agent-watcher/nova-agent-watcher-0.0.1.ebuild
new file mode 120000
index 0000000000..9723e177c8
--- /dev/null
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/nova-agent-watcher/nova-agent-watcher-0.0.1.ebuild
@@ -0,0 +1 @@
+nova-agent-watcher-9999.ebuild
\ No newline at end of file
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/ifconfig.sh b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/ifconfig.sh
deleted file mode 100644
index 2afa66cb54..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/ifconfig.sh
+++ /dev/null
@@ -1,328 +0,0 @@
-# Copyright (c) 2007-2008 Roy Marples <roy@marples.name>
-# Released under the 2-clause BSD license.
-
-ifconfig_depend()
-{
-	program /sbin/ifconfig /bin/ifconfig
-	provide interface
-}
-
-_up()
-{
-	ifconfig "${IFACE}" up
-}
-
-_down()
-{
-	ifconfig "${IFACE}" down
-}
-
-_exists()
-{
-	[ -e /sys/class/net/"$IFACE" ]
-}
-
-_ifindex()
-{
-	local index=-1
-	local f v
-	if [ -e /sys/class/net/"${IFACE}"/ifindex ]; then
-		index=$(cat /sys/class/net/"${IFACE}"/ifindex)
-	else
-		for f in /sys/class/net/*/ifindex ; do
-			v=$(cat $f)
-			[ $v -gt $index ] && index=$v
-		done
-		: $(( index += 1 ))
-	fi
-	echo "${index}"
-	return 0
-}
-
-_is_wireless()
-{
-	# Support new sysfs layout
-	[ -d /sys/class/net/"${IFACE}"/wireless -o \
-		-d /sys/class/net/"${IFACE}"/phy80211 ] && return 0
-
-	[ ! -e /proc/net/wireless ] && return 1
-	grep -Eq "^[[:space:]]*${IFACE}:" /proc/net/wireless
-}
-
-_set_flag()
-{
-	ifconfig "${IFACE}" "$1"
-}
-
-_get_mac_address()
-{
-	local mac=$(LC_ALL=C ifconfig "${IFACE}" | \
-	sed -n -e 's/.* \(HWaddr\|ether\) \(..:..:..:..:..:..\).*/\2/p')
-
-	case "${mac}" in
-		00:00:00:00:00:00);;
-		44:44:44:44:44:44);;
-		FF:FF:FF:FF:FF:FF);;
-		"");;
-		*) echo "${mac}"; return 0;;
-	esac
-
-	return 1
-}
-
-_set_mac_address()
-{
-	ifconfig "${IFACE}" hw ether "$1"
-}
-
-_get_inet_address()
-{
-	set -- $(LC_ALL=C ifconfig "${IFACE}" |
-	sed -n -e 's/.*\(inet addr:\|inet \)\([^ ]*\).*\(Mask:\|netmask \)\([^ ]*\).*/\2 \4/p')
-	[ -z "$1" ] && return 1
-
-	echo -n "$1"
-	shift
-	echo "/$(_netmask2cidr "$1")"
-}
-
-_get_inet_addresses()
-{
-	local iface=${IFACE} i=0
-	local addrs="$(_get_inet_address)"
-
-	while true; do
-		local IFACE="${iface}:${i}"
-		_exists || break
-		local addr="$(_get_inet_address)"
-		[ -n "${addr}" ] && addrs="${addrs}${addrs:+ }${addr}"
-		: $(( i += 1 ))
-	done
-	echo "${addrs}"
-}
-
-_cidr2netmask()
-{
-	local cidr="$1" netmask="" done=0 i=0 sum=0 cur=128
-	local octets= frac=
-
-	local octets=$(( cidr / 8 ))
-	local frac=$(( cidr % 8 ))
-	while [ ${octets} -gt 0 ]; do
-		netmask="${netmask}.255"
-		: $(( octets -= 1 ))
-		: $(( done += 1 ))
-	done
-
-	if [ ${done} -lt 4 ]; then
-		while [ ${i} -lt ${frac} ]; do
-			: $(( sum += cur ))
-			: $(( cur /= 2 ))
-			: $(( i += 1 ))
-		done
-		netmask="${netmask}.${sum}"
-		: $(( done += 1 ))
-
-		while [ ${done} -lt 4 ]; do
-			netmask="${netmask}.0"
-			: $(( done += 1 ))
-		done
-	fi
-
-	echo "${netmask#.*}"
-}
-
-_add_address()
-{
-	if [ "$1" = "127.0.0.1/8" -a "${IFACE}" = "lo" ]; then
-		ifconfig "${IFACE}" "$@" 2>/dev/null
-		return 0
-	fi
-
-	case "$1" in
-		*:*) ifconfig "${IFACE}" inet6 add "$@"; return $?;;
-	esac
-
-	# IPv4 is tricky - ifconfig requires an aliased device
-	# for multiple addresses
-	local iface="${IFACE}"
-	if LC_ALL=C ifconfig "${iface}" | grep -Eq '\<inet (addr:)?.*'; then
-		# Get the last alias made for the interface and add 1 to it
-		i=$(ifconfig | sed '1!G;h;$!d' | grep -m 1 -o "^${iface}:[0-9]*" \
-			| sed -n -e 's/'"${iface}"'://p')
-		: $(( i = ${i:-0} + 1 ))
-		iface="${iface}:${i}"
-	fi
-
-	# ifconfig doesn't like CIDR addresses
-	local ip="${1%%/*}" cidr="${1##*/}" netmask=
-	if [ -n "${cidr}" -a "${cidr}" != "${ip}" ]; then
-		netmask="$(_cidr2netmask "${cidr}")"
-		shift
-		set -- "${ip}" netmask "${netmask}" "$@"
-	fi
-
-	local arg= cmd=
-	while [ -n "$1" ]; do
-		case "$1" in
-			brd)
-				if [ "$2" = "+" ]; then
-					shift
-				else
-					cmd="${cmd} broadcast"
-				fi
-				;;
-			peer) cmd="${cmd} pointopoint";;
-			*) cmd="${cmd} $1";;
-		esac
-		shift
-	done
-
-	ifconfig "${iface}" ${cmd}
-}
-
-_add_route()
-{
-	local inet6= family=
-
-	if [ "$1" = "-A" -o "$1" = "-f" -o "$1" = "-family" ]; then
-		family="-A $2"
-		shift; shift
-	elif [ "$1" = "-4" ]; then
-	    family="-A inet"
-		shift
-	elif [ "$1" = "-6" ]; then
-	    family="-A inet6"
-		shift
-	fi
-
-	if [ -n "${metric}" ]; then
-		set -- "$@" metric ${metric}
-	fi
-
-	if [ $# -eq 3 ]; then
-		set -- "$1" "$2" gw "$3"
-	elif [ "$3" = "via" ]; then
-		local one=$1 two=$2
-		shift; shift; shift
-		set -- "${one}" "${two}" gw "$@"
-	fi
-
-	case "$@" in
-		*:*|default*) [ "$1" = "-net" -o "$1" = "-host" ] && shift;;
-	esac
-
-	route ${family} add "$@" dev "${IFACE}"
-}
-
-_delete_addresses()
-{
-	# We don't remove addresses from aliases
-	case "${IFACE}" in
-		*:*) return 0;;
-	esac
-
-	einfo "Removing addresses"
-	eindent
-	# iproute2 can add many addresses to an iface unlike ifconfig ...
-	# iproute2 added addresses cause problems for ifconfig
-	# as we delete an address, a new one appears, so we have to
-	# keep polling
-	while true; do
-		local addr=$(_get_inet_address)
-		[ -z "${addr}" ] && break
-
-		if [ "${addr}" = "127.0.0.1/8" ]; then
-			# Don't delete the loopback address
-			[ "${IFACE}" = "lo" -o "${IFACE}" = "lo0" ] && break
-		fi
-		einfo "${addr}"
-		ifconfig "${IFACE}" 0.0.0.0 || break
-	done
-
-	# Remove IPv6 addresses
-	local addr=
-	for addr in $(LC_ALL=C ifconfig "${IFACE}" | \
-		sed -n -e 's/^.*\(inet6 addr:\|inet6\) \([^ ]*\) .*\(Scope:[^L]\|scopeid [^<]*<[^l]\).*/\2/p'); do
-		if [ "${IFACE}" = "lo" ]; then
-			case "${addr}" in
-				"::1/128"|"/128") continue;;
-			esac
-		fi
-		einfo "${addr}"
-		ifconfig "${IFACE}" inet6 del "${addr}"
-	done
-
-	return 0
-}
-
-_has_carrier()
-{
-	return 0
-}
-
-_tunnel()
-{
-	iptunnel "$@"
-}
-
-ifconfig_pre_start()
-{
-	local tunnel=
-	eval tunnel=\$iptunnel_${IFVAR}
-	if [ -n "${tunnel}" ]; then
-		# Set our base metric to 1000
-		metric=1000
-		ebegin "Creating tunnel ${IFVAR}"
-		iptunnel add ${tunnel}
-		eend $? || return 1
-		_up
-	fi
-
-	# MTU support
-	local mtu=
-	eval mtu=\$mtu_${IFVAR}
-	[ -n "${mtu}" ] && ifconfig "${IFACE}" mtu "${mtu}"
-
-	# TX Queue Length support
-	local len=
-	eval len=\$txqueuelen_${IFVAR}
-	[ -n "${len}" ] && ifconfig "${IFACE}" txqueuelen "${len}"
-
-	return 0
-}
-
-ifconfig_post_stop()
-{
-	# Don't delete sit0 as it's a special tunnel
-	[ "${IFACE}" = "sit0" ] && return 0
-
-	[ -z "$(iptunnel show "${IFACE}" 2>/dev/null)" ] && return 0
-
-	ebegin "Destroying tunnel ${IFACE}"
-	iptunnel del "${IFACE}"
-	eend $?
-}
-
-# Is the interface administratively/operationally up?
-# The 'UP' status in ifconfig/iproute2 is the administrative status
-# Operational state is available in iproute2 output as 'state UP', or the
-# operstate sysfs variable.
-# 0: up
-# 1: down
-# 2: invalid arguments
-is_admin_up()
-{
-	local iface="$1"
-	[ -z "$iface" ] && iface="$IFACE"
-	ifconfig "${iface}" | \
-	sed -n '1,1{ /flags=.*[<,]UP[,>]/{ q 0 }}; q 1; '
-}
-
-is_oper_up()
-{
-	local iface="$1"
-	[ -z "$iface" ] && iface="$IFACE"
-	read state </sys/class/net/"${iface}"/operstate
-	[ "x$state" = "up" ]
-}
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/init.yml b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/init.yml
new file mode 100644
index 0000000000..8e066a2911
--- /dev/null
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/init.yml
@@ -0,0 +1,19 @@
+#cloud-config
+
+coreos:
+    units:
+      - name: nova-agent-auto.service
+        content: |
+          [Unit]
+          After=dbus.service
+          [Service]
+          Environment=HOME=/root
+          ExecStartPre=/bin/mount -t proc none /usr/share/oem/nova-agent/proc
+          ExecStartPre=/bin/mount -t xenfs none /usr/share/oem/nova-agent/proc/xen
+          ExecStartPre=/bin/mount --bind /dev /usr/share/oem/nova-agent/dev
+          ExecStartPre=/bin/mount --bind /sys /usr/share/oem/nova-agent/sys
+          ExecStart=/usr/bin/chroot /usr/share/oem/nova-agent/ /usr/share/nova-agent/0.0.1.38/sbin/nova-agent -o - -n -l info /usr/share/nova-agent/nova-agent.py
+          ExecStopPost=/bin/umount -f /usr/share/oem/nova-agent/sys
+          ExecStopPost=/bin/umount -f /usr/share/oem/nova-agent/dev
+          ExecStopPost=/bin/umount -f /usr/share/oem/nova-agent/proc/xen
+          ExecStopPost=/bin/umount -f /usr/share/oem/nova-agent/proc
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/net.sh b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/net.sh
deleted file mode 100755
index a80c059436..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/net.sh
+++ /dev/null
@@ -1,32 +0,0 @@
-#!/bin/bash
-
-OEM_DIR="/usr/share/oem"
-NET_CONF=$OEM_DIR/nova-agent/etc/conf.d/net
-while [ ! -e ${NET_CONF} ]; do
-        echo waiting...
-        sleep .1
-done
-
-. ${NET_CONF}
-. ${OEM_DIR}/usr/bin/ifconfig.sh
-
-for if in eth0 eth1; do
-        IFACE=$if
-        OLDIFS=$IFS
-        IFS=$'\n'
-        CONFIG="config_${if}"
-        eval CONFIG=\$$CONFIG
-        for net in $CONFIG; do
-                IFS=$OLDIFS
-                _add_address $net
-        done
-        OLDIFS=$IFS
-        IFS=$'\n'
-        ROUTE="routes_${if}"
-        eval ROUTE=\$$ROUTE
-        for route in $ROUTE; do
-                IFS=$OLDIFS
-                #_add_route $route
-                ip route add $route dev $if
-        done
-done
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/resolvconf.sh b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/resolvconf.sh
deleted file mode 100755
index 61b0f8cc6e..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/resolvconf.sh
+++ /dev/null
@@ -1,10 +0,0 @@
-#!/bin/bash
-
-OEM_DIR="/usr/share/oem"
-CONF=$OEM_DIR/nova-agent/etc/resolv.conf
-while [ ! -e ${CONF} ]; do
-        echo waiting...
-        sleep .1
-done
-
-cp ${CONF} /etc/resolv.conf
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run
index 5cd917d67e..60eb112d4e 100755
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run
@@ -1,3 +1,4 @@
 #!/bin/bash
 
-/usr/bin/systemd-run /usr/share/oem/usr/bin/nova-agent-watcher -watch-dir=/usr/share/oem/nova-agent -scripts-dir=/usr/share/oem/usr/bin/
+/usr/bin/systemd-run --unit=cloudinit-init /usr/bin/coreos-cloudinit --from-file=/usr/share/oem/init.yml
+/usr/bin/systemd-run --unit=nova-agent-watcher /usr/share/oem/usr/bin/nova-agent-watcher -watch-dir=/usr/share/oem/nova-agent -scripts-dir=/usr/share/oem/usr/bin/
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run-nova-agent.sh b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run-nova-agent.sh
deleted file mode 100755
index bf58a0fbb5..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/run-nova-agent.sh
+++ /dev/null
@@ -1,12 +0,0 @@
-#!/bin/bash
-
-AGENT_ROOT="/usr/share/oem/nova-agent"
-/bin/mount --bind /proc ${AGENT_ROOT}/proc
-/bin/mount -t xenfs none ${AGENT_ROOT}/proc/xen
-/bin/mount --bind /dev ${AGENT_ROOT}/dev
-/bin/mount --bind /sys ${AGENT_ROOT}/sys
-/usr/bin/chroot /usr/share/oem/nova-agent/ /bin/sh -c "HOME=/root /usr/share/nova-agent/0.0.1.38/sbin/nova-agent -o - -n -l info /usr/share/nova-agent/nova-agent.py" 
-/bin/umount ${AGENT_ROOT}/proc/xen
-/bin/umount ${AGENT_ROOT}/proc
-/bin/umount ${AGENT_ROOT}/dev
-/bin/umount ${AGENT_ROOT}/sys
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/ssh.sh b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/ssh.sh
deleted file mode 100755
index 518c39fad7..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/ssh.sh
+++ /dev/null
@@ -1,10 +0,0 @@
-#!/bin/bash
-
-OEM_DIR="/usr/share/oem"
-SSH_CONF=$OEM_DIR/nova-agent/root/.ssh/authorized_keys
-while [ ! -e ${SSH_CONF} ]; do
-        echo waiting...
-        sleep .1
-done
-
-/usr/bin/update-ssh-keys -a nova-agent /usr/share/oem/nova-agent/root/.ssh/authorized_keys
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/nova-agent.service b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/nova-agent.service
deleted file mode 100644
index 48804ab442..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/nova-agent.service
+++ /dev/null
@@ -1,5 +0,0 @@
-[Service]
-ExecStart=/usr/share/oem/usr/bin/run-nova-agent.sh
-
-[Install]
-WantedBy=multi-user.target
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/oem.target b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/oem.target
deleted file mode 100644
index 1d7f429fe4..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/oem.target
+++ /dev/null
@@ -1,9 +0,0 @@
-[Unit]
-Description=CoreOS Rackspace OEM Target
-Wants=nova-agent.service
-Wants=setup-networking.service
-Wants=setup-ssh.service
-Wants=setup-resolvconf.service
-
-[Install]
-WantedBy=multi-user.target
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-networking.service b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-networking.service
deleted file mode 100644
index fa7f02543c..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-networking.service
+++ /dev/null
@@ -1,7 +0,0 @@
-[Service]
-Type=oneshot
-ExecStartPre=/usr/bin/systemctl stop dhcpcd
-ExecStart=/usr/bin/timeout 60 /usr/share/oem/usr/bin/net.sh
-
-[Install]
-WantedBy=multi-user.target
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-resolvconf.service b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-resolvconf.service
deleted file mode 100644
index 3094ea9c1f..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-resolvconf.service
+++ /dev/null
@@ -1,7 +0,0 @@
-[Service]
-Type=oneshot
-ExecStartPre=/usr/bin/systemctl stop dhcpcd
-ExecStart=/usr/bin/timeout 60 /usr/share/oem/usr/bin/resolvconf.sh
-
-[Install]
-WantedBy=multi-user.target
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-ssh.service b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-ssh.service
deleted file mode 100644
index b745fee7f4..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/files/systemd/setup-ssh.service
+++ /dev/null
@@ -1,6 +0,0 @@
-[Service]
-Type=oneshot
-ExecStart=/usr/bin/timeout 60 /usr/share/oem/usr/bin/ssh.sh
-
-[Install]
-WantedBy=multi-user.target
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.1.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.1.ebuild
index a3583df7ab..a13808269a 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.1.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.1.ebuild
@@ -26,13 +26,8 @@ RDEPEND="
 
 src_install() {
 	rsync --exclude=".git" -aq ${S}/ ${D}/nova-agent/
-	rsync -aq ${FILESDIR}/systemd/ ${D}/system/
-	dobin "${FILESDIR}"/ifconfig.sh
-	dobin "${FILESDIR}"/net.sh
-	dobin "${FILESDIR}"/ssh.sh
-	dobin "${FILESDIR}"/run-nova-agent.sh
-	dobin "${FILESDIR}"/resolvconf.sh
-
 	exeinto "/"
 	doexe ${FILESDIR}/run
+	insinto "/"
+	doins ${FILESDIR}/init.yml
 }