Rackspace makes $55 million on cloud computing

Rackspace's latest quarterly statement shows the company's cloud computing arm earned up to $55 million in the last year, a growth of more than 50%.

The Daily Cloud

Rackspace crows over gold rush in quarterly statement
Rackspace's latest 10-Q shows the company sitting pretty in the cloud. Maybe not as pretty as Amazon Web Services (AWS) and its reported $500 million in cloud bucks, but Rackspace may actually be growing faster than the online bookstore when it comes to cloud computing.

While the greatest share of its revenue is still far and away from traditional hosting customers, Rackspace's cloud services are exploding as the year progresses. The numbers paint a picture of cloud computing users as numerous and small, supporting the idea that cloud is still best suited to temporary workloads like test and development and light-duty Web-based applications.

Rackspace counts 88,590 cloud users, up from 51,440 last year. It snagged about 100 new traditional, managed hosting customers in the same period, up to 19,433. Cloud revenues total about $55 million since last year, growing more than 50% year over year. Managed hosting revenues were ten times that, around $620 million, but grew at a fraction of the rate of cloud, about 14%.

Most startling in the report, however, is the news that Rackspace actually decommissioned more than 8,000 square feet of data center space. That's right, it lowered capacity and still managed to increase the amount of money it made per square foot by almost 25%, to $4,440 per technical square foot. Let's see AWS perform that trick.

Forrester says cloud storage not all that great
A new report from Forrester Research warns that cloud storage is not fit for the enterprise yet, and good only for three limited use cases. Cloud storage, like Amazon S3, lacks the security, reliability and legal guidance to be of more than limited use for businesses, according to analyst Andrew Reichman.

Use cloud storage for stuff that's already online (like your social media or airline booking websites), as part of your emergency backup solution, or as third-tier archival storage, because it might be cheaper than Iron Mountain and nobody is ever really going to look at Bob's spreadsheet on snack machine usage from 2003 anyway. Don't use it for your actual working data; pick something best of breed instead, Forrester says.

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