Dark Cloud Hovers Over Rackspace

November 9, 2015 Off By David

Grazed from WSJ. Author: Steven Russolillo.

The sky isn’t always the limit. Rackspace Hosting Inc. is finding that out the hard way. Shares in the cloud-services provider have lost nearly half their value over the past six months as revenue growth has slowed and competition has picked up. While it may be tempting to think the worst is over for Rackspace as it reports third-quarter results Monday, it probably isn’t.

Rackspace, a pioneer in the cloud market, has transitioned its business model in recent years to become more of a services provider, one that offers bundled computing and support. To combat rising competition and a price war from the likes of Microsoft Corp., Alphabet Inc.’s Google unit and International Business Machines Corp., Rackspace announced a partnership last month with Amazon.com Inc.’s cloud-computing platform, Amazon Web Services…

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