The mania around cloud computing in general

The mania around cloud computing in general and OpenStack in particular helped puff up Rackspace Hosting's latest financial report.

The quarter

During the quarter, Rackspace stacked up $247.2m in earnings, an increase of 32 per cent over the year-ago period and up 7 per cent sequentially from the first quarter. Net income rose nearly twice as fast, hitting $17.6m, up 56.8 per cent from Q2 2010.

Sales from cloud-related products are for all that a relatively small part of Rackspace's business, nevertheless they're growing fast and are all the same material. Cloud product sales rose 85 per cent in the quarter, air-kissing $43m, during more traditional managed hosting sales rose by 24.5 per cent to $204.3m. Managed-cloud services, which are the Cadillac of the Rackspace cloud offerings, have tripled since their debut in the first quarter - the average revenue from these clients is twice that from those who settle for more generic cloud offerings.

At the moment, Rackspace is adding employees a little bit more slowly than it is growing earnings, which is one reason profits are growing. Rackspace had 3,712 employees as it ended the quarter, up 23.7 per cent from a year ago.