Hosting provider Rackspace said increased cloud computing sales helped power the company to record revenue in the second quarter.

The San Antonio-based company said net revenue grew 23.2% year-over-year to $187.3 million in the quarter, and 4.8% on a sequential basis. Net income soared 60.2% to $11.2 million compared to the same period a year ago, and increased 14.1% from the first quarter.

A significant contributor to the gains was the company’s cloud computing business. Rackspace said cloud revenue increased to $23.2 million in the quarter, compared to just $13.1 million a year earlier. The number of cloud customers increased to 88,590 compared to 51,440 a year ago.

“Looking at our performance in the first two quarters of the year, it is clear that we are delivering on our financial plan,” Lanham Napier, Rackspace’s president and chief executive officer, said in a statement. “Our subscription revenue model gives us lots of stability, and we are optimistic that we will continue delivering on our goals.”

While it can be somewhat murky trying to uncover the cloud computing-based revenues of larger, multi-category companies such as Amazon or Microsoft, Rackspace is very open about breaking out its emerging cloud revenues from those of its core hosting business.

The company provides insights into other key metrics, such as number of employees and number of servers deployed. The company reported that it had 61,874 servers deployed at the end of June 30, 2010, compared to 52,269 deployed at the end of June 30, 2009. That breaks down to revenues of $3,027 per server in the second quarter of 2010, compared to revenues of $2,908 per server a year earlier.

The company said cloud computing helps boost its revenue per server, as it is able to accommodate a number of customers on a single server, whereas a hosting customer may require a dedicated server.

A highlight of the quarter was the launch of the company’s OpenStack open-source cloud computing platform. Rackspace is making the core code that powers its cloud files available through OpenStack and has said that it intends to make the code that powers its cloud servers public later this year.



Register or login for access to this item and much more

All Information Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access