• Rackspace is out of the cloud race because it moved too slow when it had the opportunity.
  • But it’s not making the same mistake again. This time it has found a weak spot in the enemy’s armor and is going all out to take advantage of that.
  • The real question is: is this new business model sustainable? Will it be enough to replace its cloud income over time? The answer is one that you need to know.

That Rackspace (NYSE:RAX) has pretty much given up on its fight against Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) is an old story. The company is now trying to position itself as a managed cloud services provider. But is this a model that can actually replace its cloud income, considering that its revenue growth is pivotal at this point? I plan to show how Rackspace has found an effective niche that takes advantage of a glaring gap in the cloud IaaS offerings of majors like Amazon Web Services and Microsoft.

Not exactly a reenactment of the David and Goliath story – this is more of a “what if” version where David runs between Goliath’s legs and makes friends with the entire army standing behind Goliath, thereby averting a war.

Continue reading at Seekingalpha.com where the original article was published.