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Rackspace Hosting Updates Rackspace Hybrid Email for 1.7 Million Users

San Antonio, TX – June 16, 2010 – Rackspace® Hosting (NYSE: RAX), the world’s leader in the hosting and cloud computing industry, has enhanced its popular Rackspace Hybrid Email offering—a custom mix of Hosted Microsoft Exchange and the business-focused Rackspace Email platform on a single domain.  Rackspace Hybrid Email now features easy calendar viewing between Hosted Microsoft Exchange and Rackspace Email, as well as a new webmail interface for Rackspace Email designed to help make businesses using the solution more productive.

“We’ve learned from our customers that, on average, only a small percentage of employees really need and use the advanced features of Microsoft Exchange, yet many businesses are paying a lot more to run Exchange for every single user,” said Kirk Averett, director of product for cloud applications at Rackspace. “With Rackspace Hybrid Email, companies can purchase a combination of Exchange and low cost Rackspace Email accounts on a single domain, without sacrificing features for any employee. Most businesses can realize a significant cost savings by utilizing this model because they have different types of email users.”

Rackspace Hybrid Email has been a key attraction for Rackspace solution partners and resellers because it provides another unique selling point, in addition to Rackspace’s Fanatical Support®.  Businesses can reduce total costs by substituting even one Exchange user with Rackspace Email. For example, using an average 80/20 ratio of Rackspace Email to Hosted Exchange, businesses can save more than 60 percent on email with Rackspace Hybrid Email compared to Hosted Exchange alone, and significantly more than hosting their own email in-house.

With the recent updates, Rackspace Hybrid Email now features:

•    Viewable Calendars – Now users can share and view calendars across the entire organization, whether it’s an Exchange user or a Rackspace Email user, for easier scheduling and coordination.
•    Improved Webmail – The new webmail interface for Rackspace Email is easy to learn and faster to navigate. New features include improved search quality and speed, and simplified customization of company logos and background images for private label resellers.
•    Simple Control Panel – Administrators can easily manage Hosted Exchange and Rackspace Email accounts and settings from one dashboard.
•    Microsoft SharePoint – All Rackspace cloud email accounts have access to free hosted SharePoint, with up to 250MB of storage, for improved document management and team collaboration.  More storage is easily purchased with low utility pricing.
•    Compatibility – Both Hosted Exchange and Rackspace Email are compatible with the Microsoft Outlook desktop client, and provide mobile support for Blackberry, iPhone, iPad, Android and Windows Mobile.
•    Fanatical Support – Rackspace goes above and beyond to serve its customers, with live support teams available 24x7x365 on chat and phone.

Creative Flavor Inc., an innovative web design and custom development company, uses Rackspace Hybrid Email with iPhone support and SharePoint services for its clients. “Hosting our client sites, email and SharePoint with one provider improves our management capabilities, reduces hosting costs, gives us better service and makes us more efficient,” said Founder and President Bill Finch. “I’ve worked with IT for over 15 years and dealt with dozens of high-quality hosting services, and Rackspace is the best in the industry. There haven’t been any hiccups or delays, the customer service is incredible, and the tools for managing the accounts allow us to be very responsive.  All of which has made for a successful relationship.”

Rackspace offers a full suite of cloud computing applications including email, collaboration and storage solutions. Rackspace hosts more than 1.7 million paid email accounts through its email platform that includes Rackspace Email, Hosted Microsoft Exchange and a hybrid offering of the two services, all backed by Rackspace’s 24×7 Fanatical Support®.

About Rackspace Hosting
Rackspace Hosting is the world’s leader in the hosting and cloud computing industry. The San Antonio-based company provides Fanatical Support ® to its customers, across a portfolio of IT services, including Managed Hosting and Cloud Computing. For more information, visit www.rackspace.com.

Forward Looking Statements

This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements concerning expected development, performance or market acceptance associated with Rackspace Hybrid Email; anticipated operational and financial benefits from Rackspace Hybrid Email; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions including the possibility that expected benefits from Rackspace Hybrid Email may not materialize because this product is not generally accepted in the marketplace, which could occur due to certain factors including (i) a failure to market the product cost effectively, differentiate the product from competitive products or communicate differentiations effectively, (ii) the reliability, quality or compatibility associated with the product, (iii) changes in technology which adversely affect the product’s benefit, (iv) slowdowns in the general economy or technology industry that impact consumer spending habits, (v) internal strategy decisions that impact the product, and (vi) other risks that are described in Rackspace Hosting’s Form 10-Q for the quarter ended March 31, 2010, filed with the SEC on May 6, 2010. Except as required by law, Rackspace Hosting assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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