As reported here at The WHIR and around the Internet, Rackspace has filed the preliminary paperwork with the United States Securities and Exchange Commission to issue an Initial Public Offer of stock (IPO). The complete S-1 documents can be found here and make pretty interesting reading for anyone who has a business involving web servers or large scale hosting.
Assuming that the IPO is issued, and that Rackspace becomes a New York Stock Exchange traded stock – this is great news for the web hosting industry. Here are the main reasons why:
An IPO at this time indicates that this sector is growing like crazy despite the specter of a U.S. recession – While there has been a pull back in a number of high visibility stock market sectors (think: housing markets, mortgages, banking, consumer durables) there is actually an acceleration in web hosting going on. This is driven by the growing acceptance of the web as the place for any and all data and applications. We are witnessing the transference of data from the desktop to the ‘cloud’. Rackspace is riding the crest of this wave and pointing the way for the entire hosting industry.
Rackspace is an almost pure play web hosting company – Anyone, either within the web hosting industry or outside, can now have much greater visibility into the specific metrics that make web hosting a great business. Many investors are reluctant to invest in a sector or industry which is complex or laden with technical jargon. Rackspace will educate the market on many of the terms and realities that accompany web hosting operations. This will benefit other web hosting companies seeking investment in the future.
A successful IPO will create demand among investors for similar companies – Once Rackspace reveals the money to be made in web hosting, the larger investment community will seek out web hosting investments. This will mean more money available for web hosting companies in every niche of hosting. In essence, the business model will be vetted and the mechanisms for profit better understood.
The publicity surrounding the IPO will generate buzz for ‘web hosting’ – Just by submitting the S-1 documents, Rackspace has already created a substantial buzz around the investment and Internet communities related to web hosting. As of this morning, there are over 111 references to Rackspace on Google news. Over 35 of those posted in the past few hours, and all related to the IPO. Web hosting buzz and publicity enriches all those in this industry.
I wish everyone over a Rackspace the very best of luck with this exciting new venture, and on behalf of the entire web hosting industry I offer a heart-felt, ”Thank You”.
About Derek Vaughan
Derek Vaughan has been actively marketing on the Internet since 1995. His extensive online marketing experience includes the online direct marketing of books for $300 million per year NYSE traded book publisher Thomas Nelson. Mr. Vaughan also marketed products online at the Walt Disney Company as the online marketing manager of ecommerce for ESPN.com. He was also the marketing manager for the launch of the NASCAR Online Store in October of 1999.
More recently Mr. Vaughan turned his attention to online marketing for the Affinity Internet, Inc. family of companies - which owns a broad portfolio of web hosting brands. Additionally, Mr. Vaughan served as Vice President of Marketing for Aplus.Net and helped them establish a strong position in the web hosting field. Derek has also serverd as the VP of Marketing at HostMySite.com.
Derek Vaughan holds undergraduate degrees from both Indiana University and Purdue University, and has earned a Master of Business Administration degree from the Owen School at Vanderbilt University.
Through his theWHIR blog, Derek will touch upon online marketing in the Web hosting space, web hosting events and industry trends.
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