Rackspace CEO Lanham Napier told Forbes that the company has no plans of selling
(WEB HOST INDUSTRY REVIEW) — A Sunday post on the Forbes blog quotes Lanham Napier, CEO of hosting provider Rackspace (www.rackspace.com) as saying the company is “not for sale,” in the wake of some speculation around further consolidation in the hosting business.
The interview was conducted last week, in the context of the recent acquisitions of Terremark, by Verizon, and of NaviSite, by Time Warner Cable, which accelerated the pace of consolidation in the data center and hosting market, and certainly fueled some speculation about further acquisitions, with Rackspace being one of the attractive operations in that market.
With speculation related to a possible acquisition (though not to a specific rumor) driving Rackspace shares upward somewhat following those deals, a Kaufman Bros analyst lowered his rating on the company, warning that the shares, while still good, might be temporarily over-valued.
Napier, however, told Forbes that Rackspace’s strategy is to “build the service leader” in the hosting space, and that plan does not involve being acquired, or buying other companies as a means of acquiring scale. He says – as Rackspace has often said – that the company feels its competitive advantage is its culture, with all the “fanatical support” and “rackers” that entails.
“Consolidation changes the competitive landscape to our advantages,” Napier told Forbes.
Rackspace reported its generally strong Q4 earnings last week, saying revenue was up 26.7 percent from the same quarter in the previous year.
The interview did include some interesting predictions related to demand in the cloud computing space. Napier said demand for cloud hosting services among enterprises is close to hitting a “tipping point,” and some observers expect a new period of steep and lasting growth in demand – 50 percent or better for the next five or six years.
He said he expects Rackspace’s 2011 top-line grown should be better than the 24 percent it showed in 2010.
The blog post concludes with the acknowledgement, by Napier, that of course the company would have to consider an enormous bid, were it to receive one, followed by the quote, “but we’re not for sale, and we want to whup these guys.”
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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