Rackspace has slashed the price of its cloud bandwidth and content delivery network (CDN) services by 33%. It’s also implementing tiered pricing for its OpenStack products, starting with Cloud Files, its object storage service.
Most of the new pricing will kick in over the next few weeks.
The bulk of Rackspace’s revenues still come from hosting. In its last quarter its cloud sales, which compete with Amazon’s, were up 49% year-over-year to $87.3 million. As good as that might sound for the last five quarters its cloud sales have been on a downward trajectory. For instance, year-over-year cloud revenue rose 69% in Q2 but only 57% in Q3.
The Wall Street Journal concluded that the company isn’t delivering on its high valuation. Its growth depends on how quickly its OpenStack Infrastructure-as-a-Service is adopted.