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Make Room for Rackspace

Stocks in this article: RAX

NEW YORK ( TheStreet) -- If you're in business for yourself or you work for a company with an online presence, you know how important it is to have a reliable "host" for your site.

This "host" has to have the powerful servers and applications needed to make your Web site operate smoothly and reliably. It should provide cloud computing services, be able to manage Web-based IT systems and have the capacity to do this for businesses of all sizes including large global enterprises.

The current heavy-weight in this vital technology is RackspaceHosting (RAX) based in San Antonio, Texas.

They're so good at providing a Web hosting service for their clients that their business has been growing at a dizzying pace, with year-over-year quarterly earnings growth reaching 43% in the three-month period ending June 30.

Shares of RAX have been as hot as their business acumen, hitting a 52-week high of $65.26 on Tuesday, Sept. 11. More about the share price later. Suffice it to say this is one of the hottest tech stocks of 2012, mainly because they're a company that's good at what they do.

Earlier this summer Rackspace was named the 2012 Microsoft Hosting Partner of the Year, an award that recognizes managed, cloud and hybrid hosting. This marks the fourth time RAX has received this coveted honor. They were chosen from among 3,000 global Microsoft partners who applied.

This speaks to their commitment to partner very closely with Microsoft (MSFT) and to grow their services in lockstep with the direction that Web hosting needs to go.

As the "newsroom" on the RAX Web site explains being selected as Microsoft's 2012 Hosting Partner of the Year was a very important way for RAX to separate themselves from their competition.

The news story went on to explain that this achievement was earned "...for demonstrating solution innovations and exemplary commitment to engaging with Microsoft."

"We have focused on hosted solutions for customers' business challenges, identified new market opportunities and along with Microsoft, used technology innovation to address customer needs. In addition, we've allowed our partners to leverage our innovation as the partner community becomes a more integral part of Rackspace and its business," exclaimed their news release. That's part of the brilliant business model that RAX has followed faithfully.

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