Agree with the value proposition. But the way things like this work a downhill slide (and I'm just pointing this out not claiming I have any more insight than

Agree with the value proposition. But the way things like this work a downhill slide (and I'm just pointing this out not claiming I have any more insight than what I've read) can be accelerated and make any business model not work for a company the size of Rackspace. In other words it takes a certain amount of business and confidence of the market to stay in business. Lose enough to someone or something else and the model no longer works very well. Especially when word gets out and it's no longer viewed as the thing to do "oh people don't rack their own servers anymore they use the cloud". [1] Keep in mind that switching from Rackspace is not trivial but it can be done it just takes time. [2] [1] Think of anything where you might say "people will always need". Once things get to a tipping point the acceleration and downhill slide becomes really important to investors and employees who begin to jump ship in record numbers. After all people still use blackberrys but you realize that when the iphone started to take hold you wouldn't think "things will be ok for blackberry there will always be people who will use them". [2] (I'm a customer and I'm happy with what they've done. I've even had emails returned by the President.) Noting though that they got rid of their very low end $16+- monthly VPS's.