Rackspace has long been the sweetheart of application developers and website owners. Its reputation for delivering “fanatical support” has made it an industry darling.
But what lives in the heart doesn’t always compute in the pocketbook, and that’s a problem when you’re a public cloud hosting company that competes against giants like Microsoft, Google and Amazon, among others. The aforementioned have cut prices and margins without getting hurt because of economies of scale.
Rackspace shares, on the other hand, have lost as much as 60 percent of their value in the past year. Needless to say, something has to improve, and it won’t likely be the price that the market is willing to pay for cloud hosting.