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Rackspace Technology

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Rackspace Technology, Inc.
TypePublic
IndustryCloud computing
Founded1996; 30 years ago (1996) (as Cymitar Technology Group)
HeadquartersSan Antonio, Texas, U.S.
Key people
Gajen Kandiah (CEO)[1]
ServicesCloud computing
RevenueDecrease US$2.69 billion (2025)
Increase −US$226 million (2025)
Number of employees
c. 4,250 (2026)
Websiterackspace.com
Footnotes
[2]


Rackspace Technology, Inc. is an American information technology cloud computing company based in San Antonio, Texas. It also has offices in Reston, Virginia, as well as in Australia, Canada, United Kingdom, India, Dubai, Switzerland, the Netherlands,[3] Germany, Singapore, Mexico, Toronto and Hong Kong. Its data centers are located in[4] Amsterdam (Netherlands), Virginia (USA), Chicago (USA), Dallas (USA), London (UK), Frankfurt (Germany), Hong Kong (China), Kansas City (USA), New York City (USA), San Jose (USA), Shanghai (China), Queenstown (Singapore) and Sydney (Australia).

History

[edit]

1990s

[edit]

Rackspace was founded in 1996 by Richard Yoo, Dirk Elmendorf and Patrick Condon. Two years later, Graham Weston and Morris Miller provided seed capital and began managing the company.[5] The company began after Yoo dropped out of Trinity University and launched Cymitar Technology Group out of a garage, through which the company sold internet access to his former classmates.[6] In 1998, the company was renamed Rackspace.[6] That year, Weston became CEO.[7]

2000s

[edit]
Pre-2008 logo

Lanham Napier entered the company in 2000 as its chief financial officer.[6] In 2006, Yoo left Rackspace[6] and Napier was named chief executive officer (CEO).[8] Weston stepped down as CEO and that year, he was named chairman.[9]

In 2008, Rackspace moved its headquarters to the then-unoccupied Windsor Park Mall in Windcrest, Texas. Rackspace's Chairman, Graham Weston, owned the Montgomery Ward building in the mall until 2006 when it was sold to a developer[10] In 2005, following Hurricane Katrina, Rackspace employees volunteered to refurbish the Montgomery Ward into a shelter for 1,300 people.[11]

The revitalization of the mall lead to development in the surrounding area, including the creation of Racker Road and the frontage road Fanatical Way, inspired by the company's trademark "Fanatical Support".[12] "Fanatical support" was the company's motto to describe its customer service.[13] This consisted of the disuse of voicemail, live customer support, and London-based customer service representatives always accessible, which at the time news reports attribute to giving Rackspace an "edge" in the web hosting industry.[14] Later, Rackspace's Fanatical Support would be used to describe a service of providing customer representatives when businesses were implementing cloud hosting.[15]

In 2008 Rackspace opened for trading on the New York Stock Exchange under the ticker symbol "RAX" after its initial public offering (IPO) in which it raised $187.5 million.[16] The initial public offering included 15,000,000 shares of its common stock at a price of $12.50 per share.[17] The IPO did not do well in the public market and lost about 20% of its initial price almost immediately.[18]

At around 3:45 PM CST December 18, 2009, Rackspace experienced an outage for customers using its Dallas–Fort Worth data center – including those of Rackspace Cloud.[19]

2010s

[edit]

In 2010, Rackspace announced it would discontinue hosting the website for Dove World Outreach Center after pastor Terry Jones said he planned to burn the Qur'an on the anniversary of 9/11.[20] Jones called the move an "indirect attack on our freedom of speech." Business Insider also criticized Rackspace's decision.[21]

In 2014, Napier stepped down as CEO and Weston was named the interim CEO.[22] Taylor Rhodes was named president and later that year replaced Weston as CEO.[23]

In August 2016, it was confirmed that the American private equity firm, Apollo Global Management, had reached an agreement to buy the company for $4.3 billion.[24] The sale was completed in November 2016 and Rackspace officially ended trading on the New York Stock Exchange on November 3, 2016.[25]

In May 2017, CEO Taylor Rhodes announced he was leaving the company, and was replaced by Joe Eazor.[26][27] Eazor was replaced in 2019 by Kevin Jones.

2020s

[edit]

In June 2020 it changed its name to Rackspace Technology.[28][29]

In August 2020 Rackspace Technology opened for trading on the Nasdaq under the ticker symbol "RXT" after its initial public offering (IPO). The Initial public offering of 33,500,000 shares of its common stock at an initial public offering price of $21.00 per share.[30]

In September 2022 the company named Amar Maletira as its new CEO.[31]

In December 2022 Rackspace suffered a major service outage which affected all its hosted Exchange users[32] (customers who bought email services from Rackspace that involved instances of Microsoft Exchange hosted on Rackspace's servers). After initial investigation Rackspace declared the incident a 'security incident' and said it had powered down its servers to protect customer data which some commentators speculated might be indicative of a ransomware incident, a theory that was lent further credence by Rackspace's decision to recommend that customers migrate to Microsoft 365 rather than wait to have their Exchange-based solutions restored. On Monday December 5, 2022, the first full day of trading after the incident (which started on the previous Friday), Rackspace's shares were down as much as 16% ($0.75).[33]

A class action lawsuit against Rackspace Technology, Inc. was filed on December 12, 2022, by Cole & Van Note for tens of thousands of businesses who lost access to their emails and services due to ransomware users. Stephenson, et al. v. Rackspace Technology, Inc.[34] This class action was dismissed by the judge in San Antonio in May, 2023.[35]

In June 2023, Rackspace launched Foundry for Generative AI by Rackspace (FAIR), a practice offering consulting and deployment services for generative AI.[citation needed]

In January 2024, Rackspace moved its San Antonio Global Headquarters from Windcrest (The Castle) to the RidgeWood Plaza II office building, located in north-central San Antonio.[36]

Rackspace recorded large non-cash impairment charges in the mid-2020s as its market capitalisation fell: $681 million in 2022, $761 million in 2023, and a further $593 million in the first quarter of 2024 alone.[37][38] The company reported a net loss of $863 million for 2024 on revenue of about $2.74 billion, with revenue declining in both of its business units.[39] Revenue fell a further 2% in 2025, to $2.69 billion, while the net loss narrowed to $226 million.[2]

In September 2025 the company named Gajen Kandiah as its new CEO, replacing Amar Maletira.[40]

On June 10, 2026, the executive committee of Rackspace's board approved a workforce realignment plan cutting about 15% of the company's global staff, roughly 750 employees. The company said it expected one-time charges of $14–19 million in 2026 and annualised savings of $75–85 million, and described the cuts as a move away from certain legacy service-delivery functions, chiefly in its Public Cloud unit, in order to redeploy resources towards enterprise artificial intelligence services.[41]

Acquisitions

[edit]

Rackspace's first acquisition was Webmail.us, an email hosting firm in Blacksburg, Virginia, bought in September 2007 and rebranded as Mailtrust.[42] In October 2008 the company announced two purchases on the same day: Slicehost, a St. Louis provider of virtual private servers, and Jungle Disk, an online backup service. The pair were bought for a reported $11.5 million in cash and stock, with up to $16.5 million more contingent on performance, and were presented as a move to compete with Amazon Web Services.[43]

Smaller purchases followed as Rackspace built out its cloud platform and its work on OpenStack. These included the server-monitoring company Cloudkick, the OpenStack development firm Anso Labs, the transactional email service Mailgun,[44] the managed MongoDB provider ObjectRocket,[45] Exceptional Cloud Services and ZeroVM.[citation needed] In February 2012 it also bought SharePoint911, a Microsoft SharePoint consultancy based in Cincinnati.[46] and in September 2017 it announced the purchase of Datapipe, a Jersey City managed hosting company.[47]

Later acquisitions were consultancies working on platforms other than Rackspace's own infrastructure: the Salesforce consultancy RelationEdge in September 2018,[48] the AWS specialist Onica in November 2019,[49] and Just Analytics, a Singapore-based cloud data, analytics and artificial intelligence firm, in January 2022.[50]

Divestitures

[edit]

Rackspace sold or spun off several of the businesses it had acquired as it refocused on managed cloud services. It sold ServerBeach, a low-cost dedicated-server brand it had launched in 2003, to Peer 1 Hosting in October 2004 for $7.5 million.[51] Mailgun was spun out as an independent company in 2017 in a transaction led by the investment firm Turn/River Capital; Thoma Bravo acquired a majority stake in 2019, and the business was later bought by Sinch.[52] Jungle Disk and Exceptional Cloud Services were also divested.[citation needed]

Other business activities

[edit]

Rackspace launched ServerBeach in San Antonio in January 2003 as a lower-cost alternative for dedicated servers designed for technology hobbyists who want flexibility and reliability. Richard Yoo was a catalyst in the startup of ServerBeach. It was sold to Peer 1 Hosting, now Cogeco Peer 1, in October 2004.[51] Peer 1 Hosting entered the UK managed hosting market in January 2009 and the ServerBeach brand now competes directly with the UK arm of Rackspace, run by Dominic Monkhouse, former managing director of Rackspace Limited.[53]

In October 2006, Mosso Inc. was launched, which experimented with white-labeling hosting services.[54] Eventually, the division became the foundation for the Rackspace Cloud Computing offering.

The Webmail.us business was branded as Mailtrust and in May 2009 became part of a newly formed Cloud Office division.[citation needed]

On October 1, 2007, Rackspace acquired Webmail.us, a private e-mail hosting firm located in Blacksburg, VA. Originally branded as Mailtrust on May 20, 2009, it became part of the newly formed Cloud Office division of Rackspace.

On October 22, 2008, Rackspace acquired Slicehost, a provider of virtual servers[55] and Jungle Disk, a provider of online backup software and services.[56]

Rackspace announced on March 8, 2017, plans for an expansion to its portfolio to include managed service for the Google Cloud Platform.[57] The program began beta testing on July 18, 2017, with a planned full offering in late 2017.[58] Rackspace partnered with Google in Customer Reliability Engineering, a group of Google Site Reliability Engineers, to ensure cloud applications "run with the same speed and reliability as some of Google's most widely-used products".[58]

OpenStack

[edit]

In 2010, Rackspace contributed the source code of its Cloud Files product to the OpenStack project under the Apache License to become the OpenStack Object Storage component.[59][60]

In April 2012, Rackspace announced it would implement OpenStack Compute as the underlying technology for its Cloud Servers product. This change introduced a new control panel as well as add-on cloud services offering databases, server monitoring, block storage, and virtual networking.[61] In 2015, two Rackspace executives were elected to the board of the OpenStack Foundation.[62] In a February 2016 interview, CTO John Engates stated that Rackspace uses OpenStack to power its public and private cloud.[63]

Recognition

[edit]

Fortune's "Top 100 Best Companies to Work For 2008" placed Rackspace as No. 32.[64] In 2011 and 2013, the company was named as one of the top 100 places to work by Fortune.[65][66]

References

[edit]
  1. ↑ "Rackspace Technology Names Gajen Kandiah Chief Executive Officer".
  2. 1 2 "Rackspace Technology Reports Fourth Quarter and Full Year 2025 Results" (Press release). Rackspace Technology. Retrieved August 11, 2026.
  3. ↑ "rackspace.com – About Us". Archived from the original on August 18, 2007. Retrieved August 13, 2007.
  4. ↑ "Rackspace Data Center Locations". Rackspace.
  5. ↑ Takahashi, Dean (April 28, 2008). "Web-hosting service Rackspace files for IPO". VentureBeat. Retrieved September 19, 2024.
  6. 1 2 3 4 Killelea, Eric. "'The end': Rackspace founder says it's 'on trajectory of death.' Other former Rackers not so sure". San Antonio Express News. Retrieved October 29, 2024.{{cite news}}: CS1 maint: deprecated archival service (link)
  7. ↑ "Graham Weston profile". Forbes. Retrieved November 15, 2024.
  8. ↑ Hicks, Nolan (February 10, 2014). "Rackspace CEO steps down". San Antonio Express News. Retrieved September 19, 2024.{{cite news}}: CS1 maint: deprecated archival service (link)
  9. ↑ "Graham Weston profile". Forbes. Retrieved November 15, 2024.
  10. ↑ "San Antonio approves boundary change for Rackspace". Archived from the original on August 11, 2007. Retrieved August 13, 2007.
  11. ↑ Martin, Justin (November 1, 2005). "Business Owners Pitch In". Fortune Small Business Magazine. Archived from the original on February 7, 2006. Retrieved October 29, 2024.
  12. ↑ Goddard, Dan (March 21, 2013). "Storming The Castle: Inside Rackspace Headquarters". San Antonio Business Journal. Retrieved January 10, 2014.{{cite news}}: CS1 maint: deprecated archival service (link)
  13. ↑ Overholt, Alison. "Cuckoo for Customers". Fast Company. Archived from the original on October 12, 2012. Retrieved October 31, 2024.
  14. ↑ Lorek, L.A. (June 3, 2004). "Rack and reign; Web host Rackspace makes a simple promise to clients: You will get fanatical support". San Antonio Express-News. Rackspace banned voice mail from its phones. The company provides live customer support around the clock by phone and on its Web site. When it's 2 a.m., a person in its London office answers the phone or Web inquiries. Providing responsive customer service has helped give Rackspace an edge in the highly competitive Web hosting industry.
  15. ↑ Mosbrucker, Kristen (July 12, 2017). "Rackspace's support for Microsoft's new privately chartered cloud could poach business clients — or give it bigger wings". San Antonio Business Journal. Retrieved October 31, 2024.{{cite news}}: CS1 maint: deprecated archival service (link)
  16. ↑ "Rackspace IPO needed to cope with fast growth". Networkworld.com. August 8, 2008. Archived from the original on June 3, 2013. Retrieved June 27, 2013.
  17. ↑ "Initial Public Offering – Press Release". Archived from the original on March 1, 2009. Retrieved August 12, 2008.
  18. ↑ "Rackspace IPO tanks". Archived from the original on April 30, 2009. Retrieved August 26, 2008.
  19. ↑ "Rackspace Goes Down. Again. Takes The Internet With It. Again". December 18, 2009. Retrieved December 18, 2009.
  20. ↑ "Host company pulls plug on Florida pastor's website". Reuters. Retrieved October 29, 2024.
  21. ↑ Saint, Nick (September 9, 2010). "San Francisco Chronicle". Archived from the original on December 6, 2010.
  22. ↑ Hicks, Nolan (February 10, 2014). "Rackspace CEO steps down". San Antonio Express News. Retrieved September 19, 2024.{{cite news}}: CS1 maint: deprecated archival service (link)
  23. ↑ "Rackspace CEO Rhodes resigns 6 months after sale". San Antonio Express-News. Retrieved May 4, 2017.
  24. ↑ Medhora, Narottam (August 26, 2016). "Apollo Global to buy Rackspace Hosting in $4.3 billion deal". Reuters. Archived from the original on August 26, 2016. Retrieved August 26, 2016.
  25. ↑ Brezosky, Lynn (November 3, 2016). "It's official: Rackspace exiting New York Stock Exchange". Retrieved November 3, 2016.
  26. ↑ "Rackspace CEO Rhodes resigns 6 months after sale". San Antonio Express-News. Retrieved May 4, 2017.
  27. ↑ at 03:01, Simon Sharwood May 25, 2017. "Rackspace demotes a CEO to hire a CEO to replace CEO who quit". www.theregister.co.uk. Retrieved May 1, 2019.{{cite web}}: CS1 maint: multiple names: authors list (link) CS1 maint: numeric names: authors list (link)
  28. ↑ "Rackspace changes name in preparation for public markets". www.bizjournals.com. June 8, 2020. Retrieved June 10, 2020.
  29. ↑ Tsidulko, Joseph (June 9, 2020). "Rebranded Rackspace Ready To Conquer Multi-Cloud". CRN. Retrieved June 10, 2020.
  30. ↑ "Rackspace Technology Announces Pricing of Initial Public Offering". Nasdaq (Press release). August 4, 2020. Archived from the original on October 7, 2022. Retrieved August 10, 2023.
  31. ↑ "Amar Maletira Named Chief Executive Officer". www.rackspace.com. Retrieved September 22, 2022.
  32. ↑ "Rackspace email outage continues as migrations prove hard".
  33. ↑ Iszler, By Madison (December 5, 2022). "Rackspace email service outage". San Antonio Express-News.
  34. ↑ "Cole & Van Note Announces Filing of Rackspace Ransomware/Data Breach Class Action". Morningstar, Inc. December 6, 2022. Archived from the original on January 18, 2023. Retrieved January 18, 2023.
  35. ↑ "Judge Throws Out Ransomware Class-Action Suit Against Rackspace -". ChannelE2E. May 22, 2023. Retrieved August 2, 2024.
  36. ↑ Biediger, Shari (September 29, 2023). "Windcrest deal could turn Rackspace HQ into industrial complex". San Antonio Report. Retrieved August 2, 2024.
  37. ↑ "Rackspace Technology Reports Fourth Quarter and Full Year 2023 Results" (Press release). Rackspace Technology. March 12, 2024. Retrieved August 17, 2026.
  38. ↑ "Rackspace Technology Reports First Quarter 2025 Results" (Press release). Rackspace Technology. Retrieved August 17, 2026.
  39. ↑ "Rackspace Technology Reports Fourth Quarter and Full Year 2024 Results" (Press release). Rackspace Technology. Retrieved August 17, 2026.
  40. ↑ "Rackspace Technology Names Gajen Kandiah Chief Executive Officer". www.rackspace.com. September 2, 2025. Retrieved September 5, 2025.
  41. ↑ "Rackspace terminates 750 workers to focus on new AI services". San Antonio Report. June 2026. Retrieved August 17, 2026.
  42. ↑ Macmanus, Richard (October 2007). "Webmail.us Acquired by Rackspace". ReadWriteWeb. Archived from the original on April 5, 2014. Retrieved October 1, 2007.
  43. ↑ Kincaid, Jason (October 22, 2008). "Rackspace Acquires JungleDisk, Slicehost To Take On Amazon Web Services". TechCrunch. Retrieved March 19, 2019.
  44. ↑ "Rackspace to Improve Cloud-Based Email Services by Acquiring Mailgun Inc". Archived from the original on June 20, 2021. Retrieved April 15, 2013.
  45. ↑ "ObjectRocket Acquired by Rackspace". Archived from the original on June 20, 2021. Retrieved April 15, 2013.
  46. ↑ Gage, Deborah (February 16, 2012). "Rackspace Buys Up SharePoint911 To Gird For Cloud Fight". Wall Street Journal.
  47. ↑ "Rackspace Announces Agreement to Acquire Datapipe". Rackspace. Archived from the original on November 26, 2018. Retrieved September 15, 2017.
  48. ↑ "Rackspace Acquires RelationEdge to Broaden Application Services". Rackspace. Archived from the original on April 15, 2019. Retrieved January 11, 2019.
  49. ↑ "Rackspace to Acquire Onica a Cloud Native Consulting and Managed Services Company" (Press release). GlobeNewsWire. November 4, 2019.
  50. ↑ "Rackspace fortifies APAC footprint with new acquisition". IT PRO. January 19, 2022. Retrieved January 19, 2022.
  51. 1 2 "Peer 1 Buys ServerBeach for $7.5 Million". October 6, 2004. Retrieved August 13, 2007.
  52. ↑ Lunden, Ingrid (April 1, 2019). "Mailgun changes hands again as Thoma Bravo buys majority stake". TechCrunch. Retrieved August 17, 2026.
  53. ↑ "Peer 1 & ServerBeach enter UK market with ex-Rackspace MD".
  54. ↑ "Mosso Leverages Utility Computing to Provide Complete Hosting Solution for Web Professionals". Archived from the original on September 26, 2007. Retrieved August 13, 2007.
  55. ↑ "Slicehost Acquired By Rackspace". Archived from the original on July 16, 2010. Retrieved January 12, 2011.
  56. ↑ "Jungle Disk Acquired By Rackspace". Retrieved January 12, 2011.
  57. ↑ Lardinois, Frederic (March 8, 2017). "Rackspace now offers managed services for Google's Cloud Platform". TechCrunch. Retrieved October 7, 2017.
  58. 1 2 Lee, Patrick (July 18, 2017). "Announcing Managed Google Cloud Platform by Rackspace". Rackspace. Retrieved October 7, 2017.
  59. ↑ Moorman, Lew (July 18, 2010). "Opening The Rackspace Cloud – The Official Rackspace Blog". Rackspace.com. Retrieved June 27, 2013.
  60. ↑ "The Official Rackspace Blog". Rackspace.com. Archived from the original on January 26, 2012. Retrieved June 27, 2013.
  61. ↑ "The Rackspace Cloud Powered By OpenStack". Rackspace. Archived from the original on May 11, 2012. Retrieved May 24, 2012.
  62. ↑ Mike W. Thomas, "OpenStack Foundation adds two Rackspace execs to board of directors" San Antonio Business Journal January 20, 2015
  63. ↑ "Rackspace Focuses on Fanatical Support, Grows to 6,000+ Employees | HostAdvice". HostAdvice. February 8, 2016. Retrieved July 27, 2017.
  64. ↑ "Fortune Magazine: 100 Best Companies to Work for 2008". CNN. Archived from the original on January 27, 2008.
  65. ↑ "Fortune Magazine". CNN. Archived from the original on January 23, 2011.
  66. ↑ "Best Companies to Work For 2013: Full List – Fortune". Money.cnn.com. January 17, 2013. Archived from the original on January 20, 2013. Retrieved June 27, 2013.
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