After years of playing offense in the cloud computing market, Rackspace Hosting (NYSE:RAX) finds itself in the uncomfortable position of playing defense, Fool contributor Tim Beyers says in the following video.
Recently, the company introduced what it calls Performance Cloud Servers. The amped-up offering promises an overall 2.6 times boost in overall efficiency for handling large jobs in the cloud, good news when so many larger peers are beefing up their own cloud infrastructures. Microsoft, for example, recently added more support for Hadoop and Big Data analysis in its Azure cloud offering. Amazon.com also recently announced several meaningful improvements to Web Services.
Rackspace's new infrastructure means more options for clients who'd otherwise look to larger competitors. Longer term, Performance Cloud Servers could help the company spin up entirely new services that yield more revenue at a higher margin. Investors should demand nothing less, Tim says.
Now it's your turn to weigh in. Do you like Rackspace's strategy? Would you buy, sell, or hold the stock at current prices? Please watch the video to get Tim's full take, and then leave a comment to let us know what you think.