Cloud, edge and decentralized computing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cloud, edge and decentralized computing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Glenn Petersen	2/11/2014 4:24:55 PM
	of 1685

Rackspace Under an Amazonian Cloud By Dan Gallagher , The Wall Street Journal Feb. 11, 2014, 3:08 p.m. EST Ironically, with its latest attempt at reinvention, Rackspace Hosting is borrowing from the slogan of the big rival helping to make that reinvention necessary. The corporate graveyard is littered with those who tried to compete against Amazon.com. Rackspace is far from dead, but its business of offering Web hosting and other cloud-based tech services has undergone a significant shift since Amazon's AWS operation got into the game with that company's usual playbook of driving down prices. AWS has made a brand of the term "re:invent," but it is Rackspace that is in flux. Chief Executive Lanham Napier is stepping down. The company on its fourth-quarter earnings call Monday vowed to focus on corporate customers who need more of a high-touch cloud partner than those who prefer Amazon's cheaper, do-it-yourself offerings. It is the right move, but Rackspace now has to regain lost momentum. Revenue growth for 2013 was 17.2% compared with 27.7% average annual growth over the prior three years. Annual earnings dropped for the first time since Rackspace went public in August 2008. The stock price has plunged more than 55% over the last 12 months, including a sharp dive Tuesday following the results. Rackspace also has to fight a perception challenge, as AWS has become the go-to name for many businesses. In a recent survey by Jefferies, 57% of respondents were considering using Amazon in their deployment of cloud-based services compared with 33% for Rackspace. And despite Tuesday's selloff, Rackspace is no bargain. The stock still trades around 55 times forward earnings, a slight premium to its five-year average. Trying to avoid a price war with Amazon is wise. To pay a stock-price multiple assuming Rackspace can pull that off without mishap is less so. marketwatch.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next