[January 17, 2013]

Rackspace's Enhanced Pay and Leave Practices Featured by FORTUNE Magazine Editors on "100 Best Companies to Work For" List

Rackspace (News - Alert)® Hosting, (NYSE:RAX), the open cloud company, today announced it has climbed to 34^th on FORTUNE magazine's annual list of the "100 Best Companies to Work For." FORTUNE has named Rackspace as one of America's top workplaces in five of the last six years. The full list and related stories will appear in the February 4 issue of FORTUNE, and today at fortune.com/bestcompanies.

"We are honored to once again be included among the great companies on the FORTUNE list, and know that our Fanatical Support and employee engagement got us here," said Lanham Napier, CEO of Rackspace. "Our employees - we call them Rackers - make our company great. I want to thank them for their work to preserve and improve our unique company culture, even as we grow."

Rackspace has invested heavily in the company's unique culture, in training and in creating fun and dynamic work environments for Rackers. Rackspace's enhanced pay and leave practices were featured by Fortune editors who noted Rackspace's policy of offering stock options to all employees upon being hired. In 2012, Rackspace also implemented a favorable Employee Stock Purchase Program and increased the number of paid days off, including three paid days for volunteer work outside of the office.

Underpinning Rackspace's culture is a complex business process that the company has refined over the past decade. That process involves everything from the way Rackspace recruits and extensively interviews prospective Rackers, to the way it tests for and develops a Racker's specific strengths, to the way it empowers Rackers to spend time and money on customer issues, to the way it measures employee and customer engagement down to the support-team level, to the way it celebrates and rewards success.

The 2012 introduction of Rackspace's open cloud marked the first time any company deployed a large-scale open source public cloud powered by OpenStack. Rackspace customers can now select from private or public cloud, dedicated, virtualized or hybrid offerings and have the flexibility to deploy their private cloud in their own datacenter, a Rackspace data center or another data center of their choice.

The open cloud platform joined over 75 products and services launches that San Antonio-based Rackspace released in 2012, reflecting a commitment to invet in innovation.

Rackspace intends to maintain its positive momentum heading into 2013 by continuing to expand the scope of its OpenStack-based solutions portfolio. In the near future, Rackspace plans to continue to enhance its portfolio with solutions for high growth opportunities, including Big Data, high scale applications, software defined network enhancements and enterprise needs, among others.

Rackspace continued to expand its global workforce in 2012. Using first-quarter figures - the latest that had been made public when the FORTUNE survey was taken - Rackspace had expanded employment by 24.1 percent from the same quarter in 2011, to more than 4,335 employees. Rackspace currently has more than 230 positions open in San Antonio, Austin, San Francisco, Blacksburg and a half-dozen other U.S. cities, as well as in Europe, Australia, and Asia. Those openings, in departments ranging from software development to tech support and sales, can be seen at http://www.rackertalent.com/.

FORTUNE Survey Methodology

To pick the 100 Best Companies to Work For, FORTUNE partners with the Great Place to Work Institute to conduct the most extensive employee survey in corporate America. Two-thirds of a company's score is based on the results of the institute's Trust Index survey, which is sent to a random sample of employees from each company. The survey asks questions related to their attitudes about management's credibility, job satisfaction, and camaraderie. The other third of the scoring is based on the company's responses to the institute's Culture Audit, which includes detailed questions about pay and benefit programs and a series of open-ended questions about hiring practices, internal communications, training, recognition programs and diversity efforts.

About Rackspace Hosting (News - Alert)

Rackspace® Hosting (NYSE:RAX) is the open cloud company, delivering open technologies and powering more than 197,000 customers worldwide. Rackspace provides its renowned Fanatical Support® across a broad portfolio of IT products, including Public Cloud, Private Cloud, Hybrid Hosting and Dedicated Hosting. Rackspace has been recognized by Bloomberg (News - Alert) BusinessWeek as a Top 100 Performing Technology Company, is featured on Fortune's list of 100 Best Companies to Work For and is included on the Dow Jones Sustainability Index. Rackspace was positioned in the Leaders Quadrant by Gartner (News - Alert) Inc. in the "2011 Magic Quadrant for Managed Hosting." Rackspace is headquartered in San Antonio with offices and data centers around the world. For more information, visit www.rackspace.com.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements about historical results or third party data that may suggest trends for our business or industry; any statements of the plans, strategies, and objectives of Rackspace for future operations or growth; any statements of expectation or belief regarding future events, and any statements of assumptions underlying any of the items mentioned. Risks, uncertainties and assumptions include the possibility that expected growth or success may not materialize because of Rackspace's failure to sustain a culture that inspires employees to provide Fanatical Support, failure to execute on its operational plans, rapid technological changes that adversely affect the demand for Rackspace products and services, shifts in customer demand, customers' and potential customers' acceptance of Rackspace products and services, and other risks that are described in Rackspace Hosting's Form 10-Q for the quarter ended September 30, 2012, filed with the SEC (News - Alert) on November 7, 2012. Except as required by law, Rackspace Hosting assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

¹ Survey methodology information provided by FORTUNE at www.Fortune.com/bestcompanies.

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