Rackspace Hosting, Inc. Earnings: Will Price Wars Kill the Cloud Provider?
May 10, 2014
Grazed from Fool. Author: Dan Caplinger.
On Monday, Rackspace Hosting (NYSE: RAX ) will release its quarterly report, and shareholders have seen the stock plunge in response to new competitive pressures. With Google (NASDAQ: GOOG ) (NASDAQ: GOOGL ) and Amazon.com (NASDAQ: AMZN ) among many companies vying for dominance in the cloud-computing arena, Rackspace will have to work harder to cement its place in the industry and keep from getting squeezed out by its rivals.
Rackspace’s business strategy has been to provide premium services for customers looking to take advantage of the power of cloud computing. Yet cost-conscious enterprise customers can be notoriously disloyal when bargains come around, and as Amazon, Google, and other players have recently started a race to the bottom in terms of pricing, Rackspace’s shareholders have started to lose confidence in the company’s ability to compete…
Let’s take an early look at what’s been happening with Rackspace Hosting over the past quarter and what we’re likely to see in its report….
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