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Rackspace Wins Frost & Sullivan Customer Value Award

Independent Report Recognizes Rackspace as Second Largest Hosted Email Provider in North America

San Antonio – January 19, 2010 – Rackspace® Hosting (NYSE:RAX), the world’s leader in hosting and cloud computing, today announced that its cloud-based applications division, Rackspace Email & Apps, has been named the 2009 Global North American Hosted Enterprise Email Customer Value Enhancement Award winner. This award recognizes Rackspace’s outstanding performance in customer service and high value-to-cost ratio, leading to improved customer retention and customer base expansion. Rackspace’s hosted enterprise email offering includes Hosted Exchange, Rackspace Email, and a hybrid of both offerings.

“With Rackspace’s corporate culture focused on world-class customer service and Fanatical Support, we are very proud to receive the Frost & Sullivan Customer Value Enhancement award,” said Pat Matthews, General Manager of Rackspace Email & Apps. “The award is a strong validation of the efforts we take on a daily basis to make sure our customers get the most value from our solutions.”

According to Frost & Sullivan’s “North American Hosted Enterprise Email Markets” report released in December 2009, Rackspace is the second largest hosted email provider in terms of installed base in the North American hosted enterprise email market. The growing cost and complexity of in-house email systems is exerting pressure on IT resources, compelling many businesses to consider alternative deployment options. Compared to on-premise solutions, hosted email has unique advantages, such as seamless setup and scalability, automatic upgrades and backups, the latest security technology, and easy data recovery. Furthermore, the customer avoids unexpected hardware, software, and maintenance expenses that are common with on-premise solutions.

“Frost & Sullivan believes that Rackspace enhances customer value by adopting standard, reliable processes and a portfolio approach in delivering hosted email to enterprises,” said Subha Rama, Unified Communications & Collaboration Industry Analyst at Frost & Sullivan.  “Partnerships with third-party application providers, solid in-house application development capabilities, and web-based APIs to encourage development by its user communities are designed to diversify its portfolio to cater to the needs of different types of customers. All of these, coupled with excellent provisioning skills, ensure service differentiation resulting in a loyal customer base.”

About Rackspace Email & Apps
Rackspace Email & Apps, the rapidly growing software-as-a-service division of Rackspace Hosting, offers a full suite of hosted email, collaboration, and storage solutions.  The Email & Apps division hosts more than 1.6 million paid email accounts through its proprietary web-based platform, Rackspace Email, hosted Microsoft Exchange, and a hybrid offering of the two services all backed by Rackspace’s 24×7 Fanatical Support.  In 2009, the Email & Apps division processed more than 30 billion emails and blocked more than 17 billion pieces of spam and 500 million viruses. To learn why Rackspace Email & Apps attracts more than 1,000 new customers each month, please visit: http://www.rackspace.com/apps

About Rackspace Hosting
Rackspace Hosting is the world’s leader in hosting and cloud computing and is ranked #43 on FORTUNE Magazine’s 100 Best Companies to work for in the United States. The company provides its customers Fanatical Support ® in their portfolio of hosted IT services, including Managed Hosting, Cloud Computing and Email and Apps. 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 about historical results or third party data that may suggest trends for our business or industry; any statements of the plans, strategies, and objectives of Rackspace for future operations or product and service offerings; any statements of expectation or belief regarding future events, potential markets or market size, technology developments, and any statements of assumptions underlying any of the items mentioned. Risks, uncertainties and assumptions include the possibility that expected benefits from our products and services may not materialize because of rapid technological changes that can adversely affect the demand for Rackspace products and services, shifts in customer demand, shifts in strategic relationships, customers’ and potential customers’ acceptance and valuation of Rackspace products and services, and other risks that are described in Rackspace Hosting’s Form 10-Q for the quarter ended September 30, 2009, filed with the SEC on November 13, 2009. 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.

Media Contacts
Cameron Nouri
Evangelist
Rackspace Hosting, Email and Apps
540-443-2016
cameron.nouri@rackspace.com

Rachel Ferry
Corporate Communications
Rackspace Hosting
210-312-3732
rachel.ferry@rackspace.com

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