Cloud Price War Impacts Rackspace Revenues
Cloud company Rackspace announced third quarter results that have failed to meet expectations and reinforced some analyst's views that the company has been negatively impacted by an ongoing cloud price war with Microsoft Azure and Amazon Web Services.
Despite not meeting expectations, the company's third quarter revenue proved better than many anticipated. Revenue for the period was $389 million, an increase of 16% on the same time the last year. Reported earnings of $16 million added 11 cents to shares. Net profit margins were 4.2%, a drop of 1.8% on second quarter levels.
Projections for the fourth quarter see the company earning around $400-408 million with Rackspace's dedicated hosting business growing stronger and the company's launch of the Performance Cloud Server improving the bottom line. Revenue from Rackspace's Public Cloud Business was $108.4 during the period while dedicated hosting brought in $280.2 million.
Do you know of any other companies impacted by price wars? Let us know the details. Add your comments below.
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