Will Fanatical Support Propel This Company Past Cloud Computing Competitors?

Rackspace Hosting (NYSE:RAX), a cloud-computing service host and software producer, is far from the norm. Chairman Graham Weston lives on a lakeside property in rural Texas holed up with the wife and kids in a trailer bought out of foreclosure for fifty grand, but you’d be losing out on a hot stock if you judged this book by the cover.

Rackspace Hosting was a Wall St. Cheat Sheet Feature Trade stock: Check Out Wall St. Cheat Sheet’s newest Feature Trades of the Month!

Upholding the customer service ideal known as “fanatical support” is a requisite of all Rackspace workers, and something the company hopes to continue to gain notoriety from. It is also a mechanism to seperate themselves from competitors, such as web-giants Amazon (NASDAQ:AMZN), and Apple (NASDAQ:AAPL), who boast much larger pools of resources, labor, and free capital.

Just how fanatical are the customer service staff at Rackspace? Consider that RAX employees will regularly track clients so intently that they are known to have pizza delivered to them in times of need (long days at the office, stressful changes, etc) and to sereanade them via phonelines with “Happy Birthday” melodies on birthdays. Working at Rackspace is more than just a job, according to Weston, “We have to become one of the most trusted people in our customers’ lives.”

So how is Rackspace’s (NYSE:RAX) customer service crusade translating into corporate success? Not very shabbily at all. “Since 2007, Rackspace’s sales have grown by an average of 30 percent every year, and analysts expect net income to climb 49 percent this year, to almost $70 million. Wall Street has caught on: Rackspace shares, up almost tenfold since early 2009, are trading near an all-time high of $46 per share, valuing the company at more than $5.6 billion. Customers include 40 percent of the top U.S. companies by revenues.”

Rackspace Hosting was a Wall St. Cheat Sheet Feature Trade stock: Check Out Wall St. Cheat Sheet’s newest Feature Trades of the Month!

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