Managed cloud company
Rackspace saw a $20 million increase in its revenues in the second quarter of 2014. The company, which designs, builds, and runs cloud options that are supported by its famed "Fanatical Support", has never generated this level of revenue in a single quarter before. However, despite the news Rackspace shares fell 2.2% in afterhours trading.
Rackspace's second quarter revenue totaled $411 million, a 17% increase on the same time last year. Taylor Rhodes, Rackspace's President, has attributed this success to the company's Infrastructure-as-a-Service-based cloud activity and it adding two new levels of managed cloud services. The company has also simplified its pricing policy while avoiding taking part in the pricing war other cloud providers are engaged in. While the company's prices are not the lowest in the market, the value added by its "Fanatical Support" approach has attracted more customers.
Rackspace's managed cloud services are expected to grow to the extent that it becomes a leading player in the area. However, despite its value added approach, some analysts are wary, suggesting that Rackspace is operating in an arena where customers are actively searching for the lowest priced services.
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