Rackspace (News - Alert), an email hosting provider, has recently revealed better-than-expected revenue in regards to public cloud growth.
The company’s second quarter profit has increased by 43 percent within its public cloud business division, putting to rest its concerns that a new information management system might interrupt its historically robust expansion.
While revenue from Rackspace's public cloud business rose to 69 percent in the latest quarter, its dedicated cloud revenue climbed 21 percent.
“In general, five years from now, I believe the vast majority of compute consumed in our facilities will be in cloud form," Chief Executive Lanham Napier told Dow Jones Newswires, in a statement. Although the launch of the company's newest cloud management system took longer than expected, he added that customers are growing more comfortable with it.
In addition, the company’s profit has continue to ramp up each year for the last three as it has benefited significantly from businesses' growing demand for more efficient ways to manage mounting troves of information. Also, the email hosting provider’s cloud computing offerings which are increasingly being leveraged, are continuing to help companies to rent server and storage capacity by the hour, paying only for what they use.
RackSpace has spent the past quarter rolling out several new features of OpenStack, which is a cloud computing platform. And back in May, the company warned it could introduce fresh volatility into its top line.
"People's fears that Rackspace was going to come up short because of OpenStack didn't materialize," added Patrick Walravens, an analyst at JMP Securities (News - Alert).
The organization has planned to release some new OpenStack features to customers in the third quarter. It will also be allowing customers to use its legacy cloud platform if they are hesitant to migrate to the new system.
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