Saturday, October 20, 2012

How Reasonable Rackspace Hosting's Sky-High PE?


San-Antonio-based Rackspace Hosting (RAX-$64.75) is hoping to differentiate itself from its cloud-computing competitors by developing product offerings built around OpenStack, an open-source cloud platform. The differentiating benefit, according to chief executive Lanham Napier, is that customers wouldn’t be locked into a “static product” like Amazon’s Web Service.

Attracted to the growth-demand story for cloud hosting services, the competitive landscape is getting more crowded. Notwithstanding the plethora of VC-seeded providers flooding the market, better-capitalized companies are planting their roots in Rackspace’s yard too. Competitors include rival cloud solutions providers Equinix (EQIX) and VMWare (VMW); diversified technology companies like Amazon, Microsoft (MSFT), Google (GOOG), and IBM (IBM); and software companies like salesforce.com (CRM).


David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

1 comment:

Commodity tips said...

Pretty good post. I just stumbled upon your blog and wanted to say that I have really enyed reading your blog posts. Any way I'll be subscribing to your feed and I hope you post again soon