Rackspace Hosting Expands Cloud Computing Footprint in U.K.

Rackspace Hosting and Digital Realty Trust have teamed up on a major cloud computing initiative in the U.K. Rackspace will expand its cloud computing infrastructure, and Digital Realty Trust has been tapped to build a new data center as part of the expansion.

With a total server count of more than 10,000, Rackspace has undergone steady growth in its cloud business over the past year. Revenue has also improved by 27 percent, and San Antonio-based Rackspace has been moving into Europe and Asia as well as expanding its U.S. cloud computing services.

The cloud computing company has been operating U.K. data centers for several years, with an energy-efficient facility installed in 2009 in London suburb Slough. This spot consolidated servers from older facilities, and the company rolled out its cloud offerings for U.K. customers in 2011. The offerings include Rackspace Cloud Files and Cloud Servers.

Rackspace signed the agreement for the new 10 megawatt data center on January 11 with a subsidiary of Digital Realty. The exact location of the site has not yet been determined, but the companies are required to choose a site within the next year according to the SEC filing. They will then be required to determine the data center design, and the agreement is also open for future development.

The new facility will include five data halls, with three halls of around two megawatts each being built first, followed by two additional halls. The deal with Digital Realty expands on Rackspace's core business of leasing wholesale data space to expand its footprint instead of building its own facilities. As a tenant, the company leases a dedicated, fully-built data center space for a significant premium. The company avoids the capital investment required to construct its own data center, however.

The company has already leased a variety of wholesale space, including locations in Dallas and Sydney, Australia from Digital Realty. They have also leased space in Virginia and Chicago from DuPont Fabros Technology (DFT), and Rackspace has additionally purchased land in Oregon for possible future cloud computing expansions.