88 Per Cent of Cloud Users Point to Cost Savings According to Rackspace Survey

  88 Per Cent of Cloud Users Point to Cost Savings According to Rackspace
  Survey

Business Wire

LONDON -- February 20, 2013

Rackspace Hosting, the open cloud company, reported in a study released today
that 88 per cent of cloud users point to cost savings. In addition, 56 per
cent of respondents agree that cloud computing has helped them boost profits.

The study, conducted by Rackspace Hosting with support from Manchester
Business School and Vanson Bourne, found that 88 per cent of UK and US
business respondents using the cloud have saved money. 62 per cent are
reinvesting these savings back into the business to do things like increase
headcount, boost wages and drive product innovation. Sixty eight per cent also
say the use of open source cloud is on the increase.

The study of 1300 organisations in the UK and US^1 also revealed:

  *56 per cent have been able to increase profits through using cloud
    services
  *49 per cent have been able to grow their business through use of the cloud
  *60 per cent say that cloud computing has reduced the need for their IT
    team to maintain infrastructure, giving them more time to focus on
    strategy and innovation.

Open standards an increasing factor

The research indicates that the US is leading the way in the deployment of
open cloud (70 per cent) compared to the UK (42 per cent), while both see open
standards as an increasing factor when deploying cloud computing. Seventy four
per cent of the US organisations are seeing their use of open source cloud on
the rise (57 per cent in the UK), while 86 per cent feel that open standards
are boosting their ability to innovate, compared to 79 per cent of UK
respondents.

Reinvesting savings back into the business

Importantly, the majority (62 per cent) of these firms are reinvesting the
money saved through cloud computing back into the business. One priority for
reinvesting this cash is improving and expanding product and service
innovation (stated by 48 per cent). However, 25 per cent of respondents also
reinvested money into boosting wages and bonuses (34 per cent in the US; 15
per cent in the UK). The survey points to a potential boon for jobs with 22
per cent employing more people with the cash saved from cloud computing.

Boost to profits

It’s not just savings that the survey identified, nearly half of UK and US
businesses surveyed (56 per cent) agreed that cloud computing has directly
helped to boost profits. Furthermore 49 per cent stated that cloud computing
has been a key factor in enabling their company to grow its business (58 per
cent in the US; 40 per cent in the UK).

Benefits for start ups

The study also pointed to powerful cloud benefits for startup businesses. A
massive, 90 per cent of businesses that have started in the last three years
say the cloud has made it easier to set up their business. Furthermore, over
half of the startups surveyed (52 per cent) said they wouldn’t have been able
to afford on-premise IT resources at the time they wanted to launch. This was
explained by Garry Prior, Co-founder of start up, Taxi for Two “Without the
ability to run our infrastructure on the cloud, we simply couldn’t afford to
set up business.”

John Engates, Chief Technology Officer, Rackspace, says: “The study shows just
what an important impact cloud computing is having on UK and US businesses.
It’s particularly interesting that, despite the ongoing economic backdrop,
half of businesses on both sides of ‘the pond’ are actually increasing profits
and growing their business through use of the cloud. This includes investing
in headcount and wages as well as driving further innovation.”

Dr. Brian Nicholson at Manchester Business School says: “Cloud computing is
heralding a boon for startups at a time when they are most needed. By making
high end computing resources available on flexible payment terms at the push
of a button we are significantly reducing the level of investment required to
set up shop. It has arguably never been easier to start a business and much of
that is down to the flexibility of cloud computing.”

                                     ENDS

About the research

Quantitative research was conducted by Vanson Bourne of 1300 companies in the
UK and US (split equally) during December 2012. Manchester Business School
carried out qualitative interviews with companies that use the cloud by
telephone during December 2012 and January 2013. You can find the report here

About Rackspace

Rackspace® Hosting (NYSE: RAX) is the open cloud company, delivering open
technologies and powering more than 205,000 customers worldwide. Rackspace
provides its renowned Fanatical Support® across a broad portfolio of IT
products, including Public Cloud, Private Cloud, Hybrid Hosting and Dedicated
Hosting. The company offers choice, flexibility and freedom from vendor lock
in. Rackspace has been recognised by Bloomberg BusinessWeek as a Top 100
Performing Technology Company and is featured on Sunday Times list of 100 Best
Companies to Work For. Rackspace was positioned in the Leaders Quadrant by
Gartner Inc. in the “2011 Magic Quadrant for Managed Hosting.”

Rackspace Limited, the UK subsidiary of Rackspace Hosting®, is headquartered
in San Antonio with offices and data centers around the world. For more
information, visit rackspace.co.uk.

Forward Looking Statements

This press release contains forward-looking statements that involve risks,
uncertainties and assumptions. If such risks or uncertainties materialize or
such assumptions prove incorrect, the results of Rackspace Hosting could
differ materially from those expressed or implied by such forward-looking
statements and assumptions. All statements other than statements of historical
fact are statements that could be deemed forward-looking statements, including
any statements about historical results or third party data that may suggest
trends for our business or industry; any statements of the plans, strategies,
and objectives of Rackspace for future operations or growth; any statements of
expectation or belief regarding future events, and any statements of
assumptions underlying any of the items mentioned. Risks, uncertainties and
assumptions include the possibility that expected growth or success may not
materialize because of the lack of acceptance of cloud computing in the
marketplace or specifically, Rackspace’s cloud computing services, Rackspace's
failure to execute on its operational plans, rapid technological changes that
adversely affect the demand for Rackspace services, and other risks that are
described in Rackspace Hosting's Form 10-Q for the quarter ended September 30,
2012, filed with the SEC on November 7, 2012. Except as required by law,
Rackspace Hosting assumes no obligation to update these forward-looking
statements publicly, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if
new information becomes available in the future.

^1 650 of the respondents were located in the UK and 650 of the respondents
were located in the US

Contact:

3 Monkeys Communications
Zuzana Bielikova
020 7009 3152
Zuzana.Bielikova@3-monkeys.co.uk
 
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