Rackspace Hosting Expands to Asia

Company Opens Asian Headquarters and Hong Kong Data Center

Hong Kong – September 8, 2008 – Rackspace® Hosting (NYSE: RAX), the world’s leader and specialist in hosting services, today announced the opening of its Asian headquarters and data center in Hong Kong. This expansion into Asia marks the Company’s continued investment in superior customer service and exhibits its confidence in the business opportunity that Asia represents.

Rackspace selected Hong Kong due to its reputation within the global business economy, its world-class IT infrastructure, multiple telecommunication providers and rich talent pool. Rackspace also solicited feedback from its current customer base in the Asian Pacific region and the majority of those respondents confirmed their preference for doing business in Hong Kong. The data center, located in the Fo Tan district of Hong Kong, will represent an investment of at least US$20 million when complete, inclusive of data center lease obligations and infrastructure, equipment and personnel expenses. The new data center will initially have approximately 9,500 gross square feet and will be expandable to about 18,000 gross square feet.

“As our customers expand to other regions, they want a partner that will grow with them, and our expansion into Asia is an important step towards meeting our goal of becoming one of the world’s great service companies,” said Lanham Napier, president and CEO, Rackspace Hosting. “Hong Kong has a strong local economy and growing customer demand for hosting, especially in the financial services area, so we look forward to a successful expansion in the Hong Kong market.”

The operation in Hong Kong will offer the full range of Rackspace service offerings including managed hosting, cloud hosting, virtualization, security and email services, storage and backup and professional services. The sales and support will be handled on a global basis with teams located in Hong Kong, the US and UK. Rackspace already has more than 500 customers based in Asia Pacific and the establishment of the data center in Hong Kong is an important step in strengthening the Company’s presence to build on its hosting service offerings.

Mr Simon Galpin, Acting Director-General of Investment Promotion at InvestHK, welcomed the launch of Rackspace’s Asia headquarters and data center in Hong Kong by saying, “We are naturally very pleased that Rackspace has decided to invest in Hong Kong. As a hosting provider, Rackspace provides round-the-clock and reliable services to clients. Hong Kong is an excellent choice for a data center. Our stable political environment, sound legal systems that protect data and intellectual property rights, as well as world-class telecommunications, information technology and electric power infrastructure ensure the smooth running of the center. And Hong Kong’s position as the gateway to Mainland China, soon to be the world’s third largest economy, provides a springboard for overseas companies to go into Mainland China. We look forward to the successful development of the data center and the business success of Rackspace in Hong Kong and elsewhere in this region.”

Another helpful factor in securing Rackspace’s presence in Hong Kong was the company’s partner, Dell Hong Kong Limited. “As a global leader in technology, Dell is committed to providing its customers and partners the best in-class products and services that meet the needs of their growing business,” said Steve Lam, managing director, Dell Hong Kong Limited. “We have been in close discussions with Rackspace, both in the US and here in Hong Kong, to discover all the intricacies of helping set up their first data center in Asia. These discussions entailed near-term and long-term business and technical goals, the right infrastructure and professional support, right up to location requirements.  We are proud that our Infrastructure Consulting Services, servers and storage solutions fit perfectly well with the high expectations of Rackspace and its customers. This is as much a milestone for Dell as it is for Rackspace’s expansion into Asia, and we are delighted to play our role.”

“Asia represents a significant growth opportunity for Rackspace. The foundation of our success is hiring new “Rackers” in Hong Kong to join our unique work environment and bring a fresh perspective of service to our award-winning Fanatical Support®,” says Jim Fagan, managing director, Rackspace Hosting Asia.

The data center in Hong Kong joins Rackspace’s existing data center operations, including facilities in San Antonio, Dallas, northern Virginia and London. Over the past five years, Rackspace has grown net revenues more than 50 percent per year to US$362 million in 2007, and serves more than 31,000 businesses located in more than 100 countries.

About Rackspace
As the world’s leader and specialist in hosting, Rackspace Hosting is changing the way businesses worldwide buy IT. Rackspace delivers computing-as-a-service, integrating the industry’s best technologies into a flexible service offering, making computing more reliable and affordable. A trusted partner to companies of all sizes, Rackspace enables IT departments to be more effective. Rackspace is distinguished by its award-winning Fanatical Support®, furthering the company’s mission to be one of the world’s greatest service companies. Rackspace is recognized as one of FORTUNE Magazine’s 100 Best companies to work for in the US, ranking number 32 on the 2008 list.  Rackspace’s portfolio of hosted IT services includes managed hosting (www.rackspace.com), email hosting (www.mailtrust.com) and cloud hosting (www.mosso.com). For more information on Rackspace Hosting please visit www.rackspace.com.

Forward Looking Statements
This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 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 investment in and development of the Hong Kong operation, anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits may not materialize as expected; the achievement of expected operational results; failure of third party hardware and software, power failures and service interruptions, material lawsuits, governmental regulations, and other risks that are described in Rackspace Hosting’s amended registration statement on Form S-1 (File No. 333-150469), filed with the Securities and Exchange Commission on August 5, 2008. 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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Rackspace Hosting Expands to Asia

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