As you look over the third quarter numbers posted by Rackspace Hosting earlier this week, you have to be impressed.
Granted, some of us impress easier than others. Total revenues for the third quarter climbed to $162.4 million - a 17.4 percent increase from last year. Net income rose to $7.6 million from $5.2 million, as well. Revenues from Cloud hosting more than doubled to $15.3 million from the $6.4 million registered in the same period last year. If the dollars don’t make an impact, Rackspace also grew its customer base by just over 10,000 to 80,944. The number of Cloud customers swelled to 61,616 this quarter from last year’s figure of 18,173.
Will this momentum continue?
Considering that Cloud hosting only represents 10 percent of the Rackspace pie right now, there's plenty of room for growth.
Customer wins are continuous. Posterous, a blogging service provider formed in 2008, just signed on and the company's co-founder, Sachin Agarwal, relays that: "We built a dead simple application for everyone – from geeks to soccer moms – to share thoughts, pictures and videos, and we needed a cost effective hosting solution to run it. We had turned to The Rackspace Cloud for affordability, the ability to spin up new servers in seconds, uptime and for Fanatical Support. We’ve been so happy with the service that we have now made the decision to switch to Rackspace Cloud Files, from Amazon’s S3, for our new storage needs."
If that's even a small reflection of the customer sentiment of Rackspace's product and support services, growth prospects remain strong. And as the latest survey of the IT sector by LoudHouse indicates, there are plenty of IT managers challenged by the 'hassle of managing servers' and a great deal would just as soon outsource that function to focus on other more meaningful, strategic and progressive tasks. Rackspace, of course, stands to benefit.
Finally, the stock price (RAX) hit a 52-week high at $19.67 on Nov. 10th, a measure that indicates, at least, the investors are impressed.
Rackspace Hosting Hitting It's Stride
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