Rackspace Looking at Cloud Partnerships to Add to RevenueJack Clark
Rackspace Hosting Inc. is open to forging partnerships with large cloud-computing operators such as Amazon.com Inc. and Microsoft Corp. as the company seeks to bolster slowing revenue growth.
The San Antonio, Texas-based company “may at some point offer support on top of Amazon’s cloud,” Chief Executive Officer Taylor Rhodes said in an interview Monday.
Rackspace, which has faced price cuts by Amazon, Microsoft and other competitors, decided in September to reject approaches by multiple groups interested in a partnership or acquisition. Since then, Rhodes hinted that the company has had a team looking at supporting customers who are renting computing services from other providers. Rhodes confirmed on Monday that Rackspace intends to provide third-party support for users of rival cloud-computing services via a combination of people and customized-management software, if Rackspace comes to an agreement with one or more providers allowing it to offer such services.
“There are future versions of our model that will be more capital light and more service oriented,” Rhodes said.
Rackspace shares fell less than 1 percent to $50.56 at 12:57 p.m. in New York. The stock is up about 8 percent this year, after climbing 20 percent in 2014.
Such partnerships could add to revenue as early as 2016 if they happen, Rhodes said. Discussions are still at an early stage, the CEO said.