Rackspace US, Incorporation.
(dba Rackspace)

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Type	Public company (NYSE: RAX)
Industry	Hosting
Founded	1998
Headquarters	5000 Walzem Road San Antonio, TX  78218
Key people	Richard Yoo, Dirk Elmendorf, Patrick Condon, Co-Founders Morris Miller, Graham Weston, Executive Chairman Lanham Napier, President, CEO
Revenue	$1.025 billion (2011)[1]
Operating income	$123.5 million (2011)[1]
Net income	$76.41 million (2011)[1]
Total assets	$1.026 billion (2011)[1]
Total equity	$599.42 million (2011)[1]
Website	http://www.rackspace.com

Rackspace US, Inc. (NYSE: RAX) is an IT hosting company based in San Antonio, Texas. The company also has offices in Australia, the United Kingdom, The Netherlands^[2] and Hong Kong, and data centers operating in Texas, Illinois, Virginia, the United Kingdom, and Hong Kong as of late 2008. The company's email and apps division operates in Blacksburg, VA.

Its clients include 40% of the members of the Fortune 100.^[3] In 2011, the company was named as one of the top 100 places to work by Fortune Magazine.^[4] Rackspace UK has also appeared in The Sunday Times best employers' awards in 2007, 2008, 2009, 2010 and 2011 and was listed in the top 50 UK workplaces by the Financial Times.

History[link]

In 1996, Richard Yoo started a small ISP called Cymitar Network Systems out of his garage apartment in San Antonio, Texas. The company quickly began doing application development work in addition to offering basic Internet access and web hosting. In 1997, Yoo brought on Dirk Elmendorf. When the company began to develop Internet applications as its primary business, the company was re-formed as Cymitar Technology Group. As Cymitar Technology Group grew, Patrick Condon was recruited from California and joined the team in 1998. Coincidentally, all three of the company's founders were students at one time at Trinity University in San Antonio.

Although the founders began as application developers for end-users, they found that most companies didn't know how to host their applications, or didn't want to be involved in the hosting. The founders wanted to keep their focus on the application development–not the hosting–but they were unable to find an opportunity to outsource the hosting work. Eventually, the founders realized that it would be better to create a product to serve the hosting need and launch it as a company. Rackspace was launched in October 1998 with Richard Yoo as its CEO. Although most hosting companies focused on the technology end of hosting, Rackspace created its "Fanatical Support" offering to focus on service and support.^[5] On March 28, 2000, Rackspace received funding through Norwest Venture Partners and Sequoia Capital. George J. Still, Jr., Managing Partner at Norwest, subsequently joined the Board of Directors where he continues to serve today.^[6]

Business model[link]

Rackspace has two main service-level segments: Managed and Intensive. Both service levels receive support via e-mail, telephone, live chat, and ticket systems, but they are designed to fit the needs of different businesses.

The Managed support level consists of "on-demand" support where proactive services are provided, but the customer is welcome to contact Rackspace when they need additional assistance.

The Intensive support level consists of "proactive" support where many proactive services are provided, and customers receive additional consultations about their server configuration. Highly customized implementations generally fall under this level of support.

Some services and products are only available for certain support levels.^[7]

Involvement with other companies[link]

Rackspace launched ServerBeach in San Antonio in January 2003 as a lower-cost alternative for dedicated servers designed for technology hobbyists who want flexibility and reliability. Richard Yoo was a catalyst in the startup of ServerBeach. A bandwidth and colocation provider, Peer 1 Hosting, purchased ServerBeach in October 2004 for $7.5 Million.^[8] Peer 1 Hosting entered the UK managed hosting market in January 2009 and the ServerBeach brand now competes directly with the UK arm of Rackspace, run by Dominic Monkhouse, former managing director of Rackspace Limited.^[9]

In October 2006, Mosso Inc. was launched, which experimented with white-labeling hosting services.^[10] Eventually, the division became the foundation for Rackspace's current Cloud Computing offering.

On October 1, 2007, Rackspace acquired Webmail.us, a private e-mail hosting firm located in Blacksburg, VA. Originally branded as Mailtrust on May 20, 2009, it became part of the newly formed Email and Apps division of Rackspace.

On October 22, 2008, Rackspace acquired Slicehost, a provider of virtual servers^[11] and Jungle Disk, a provider of online backup software and services.^[12]

Expansion into the Asia Pacific Region[link]

The company is experiencing heavy customer growth, especially in the Asian marketplace. The Asian office is a natural step in Rackspace.com's expansion outside the U.S. and London to cater for worldwide customers’ needs in Hong Kong / China Hosting. Rackspace selected Hong Kong as the Asia Pacific regional office in part because of its reputation within the global business economy, its world-class IT infrastructure, multiple telecommunication providers and rich talent pool. Rackspace also solicited feedback from its current customer base in the Asia Pacific region, and the majority of those respondents confirmed their preference for doing business in Hong Kong.

Recent news[link]

In 2008 Rackspace moved their headquarters from a building once occupied by Datapoint Corporation to the then-unoccupied Windsor Park Mall in Windcrest, Texas. Rackspace's Chairman, Graham Weston, owned the Montgomery Ward building in the mall until 2006, when it was sold to a developer. The city of Windcrest is purchasing 111 acres (0.45 km²) south of the mall to create a residential and retail complex.^[13] The facility is located next to Roosevelt High School, and many Roosevelt students intern at Rackspace.

The Fortune Magazine's "Top 100 Best Companies to Work For 2008" placed Rackspace as #32 the first year that Rackspace applied for consideration. The company was praised for its transparency. Regular "Open Book" meetings are held where the top level leaders share in-depth financial information with all employees.^[14]

On August 8, 2008, Rackspace opened for trading on the New York Stock Exchange under the ticker symbol “RAX” after its initial public offering (IPO) in which it raised $187.5 million.^[15] The initial public offering included 15,000,000 shares of its common stock at a price of $12.50 per share.^[16] The IPO did not do well in the public market and lost about 20% of its initial price almost immediately.^[17]

On September 8, 2010, Rackspace received national attention when they decided to discontinue providing web hosting service to one of their customers, Dove World Outreach Center.^[18] This was in reaction to Dove World's pastor Terry Jones' plan to burn several copies of the Qur'an on the anniversary of the September 11th attacks. Rackspace claims that this violated their company policy. This move came under criticism, notably from Terry Jones himself, who described it as an "indirect attack on our freedom of speech." Others questioned the appropriateness of Rackspace's action, stating that there is "absolutely no reason for web hosts to have an editorial policy, and this only gives Jones more attention, and makes him look more persecuted."^[19]

On June 3, 2011, Rackspace intervened in an application by Queensland host Rack Servers to trademark its business name in Australia.^[20]

Acquisitions[link]

On October 22, 2008, Rackspace announced that it was purchasing cloud storage provider Jungle Disk and VPS provider SliceHost.

On February 16th, 2012, Rackspace acquired SharePoint911, a SharePoint consulting company based in Cincinnati Ohio.^[21]

Worldwide/EMEA[link]

Rackspace serves customers worldwide and has offices and data centers in the USA, Australia, United Kingdom, The Netherlands and Hong Kong.

Rackspace is registered in the UK as Rackspace Ltd. and as of 2011 employs about 700 people, at an office (in Hayes, Middlesex) and a rented data center (in and around London). The company opened a fourth UK data centre in Slough, Berkshire in the second quarter of 2008. Rackspace UK has appeared in The Sunday Times best companies awards 2007,2008,2009,2010 and 2011 and was in the top 50 UK workplaces as seen in the Financial Times.

A few of the well-known large organisations served by Rackspace's UK web hosting services include Confused.com, Vue, Renault, online publication The Register, Huddle, Funny or Die, Metacafe, Suicide Girls, and net connect.

Rackspace Benelux in Amsterdam opened its offices in October 2007. It has won several high-profile customers such as LogicaCMG, Exact Software and CapGemini.

Rackspace Australia in Sydney opened its offices in March 2009. It has won several high profile customers and partners such as Westfield Holdings, Wotif.com, Sage Australia, Xero, Netstarter and Market Boomer.

See also[link]

• Rackspace Cloud - Rackspace's cloud computing hosting
• Jungle Disk - Rackspace's Online Storage and Backup for Personal and Home Office Use

References[link]

External links[link]

• Rackspace Website
• Rackspace Asia Pacific Office
• The Rackspace Cloud