By: Gigaom
Rackspace sees solid cloud growth, but shares skid anyway
OpenStack kingpin Rackspace reported solid cloud growth for its fourth quarter and fiscal year end.

Rackspace had a pretty good quarter when it came to cloud growth, which was fueled by its new OpenStack-based cloud business. Overall, the San Antonio, Texas company reported that revenue from its total cloud business (including public and dedicated cloud) was up nearly 25 percent year over year to $353 million from $336 million.

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“How much of that growth is on the new platform? Today we’d say virtually all of it is,” Rackspace CEO Lanhalm Napier told analysts on the company’s earnings call Tuesday afternoon.

“In prior calls we talked about customers naturally migrating [from our older platform] and we’re seeing that but what we’re seeing is traction on the new platform.” “On prior calls we discussed we were having conversations with CIOs about the open cloud and those conversations have progressed into pilots,” he said.

Revenue for the quarter was up 25 percent year over year and 5 percent sequentially to 21 cents per share on $353 million. The consensus estimate had been 21 cents EPS on revenue of $355 million. That miss caused Rackspace shares to swoon in after hours trading.

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