It has emerged that Lanham Napier has retired from his position as CEO of hosting company Rackspace and will be replaced on a short-term basis by co-founder and Executive Chairman, Graham Weston.
Rackspace is one of the leading companies in hybrid cloud-computing, offering clients a broad product portfolio which includes public cloud space, private cloud space, and dedicated servers. They operate out of San Antonio and have data centres in the USA, Australia, the United Kingdom, The Netherlands, Switzerland, Israel, and Hong Kong.
The news comes after the firm released their financial results for the period. Despite an increase in revenue of 15.6% to $408.1 million, fourth quarter earnings fell 30%, and the share price is 45% down on last year. Net income was reported at $20.8 million for the period, with Rackspace blaming rising costs for the drop from $29.9 million a year earlier.
Nonetheless, Napier, who has been at the company for fourteen years, has presided over astonishing growth. During his tenure, the company developed from a small tech start-up into one the fastest growing listings on the New York stock exchange, with a value in excess of $1.5 billion and over 200,000 customers.
In a statement, he said he believed the decision to be the correct one for both himself and the company, whilst also maintaining that he supported the decision to appoint Weston as his successor.
Weston, who is returning to a role that he held from July 1999 to August 2006, said “I’m personally grateful to Lanham for fourteen years of partnership and friendship as we worked side-by-side to build this company. Lanham has been an inspiring and successful leader”.
The outgoing CEO, who will remain at the company in the coming months to assist in the transition, said he intends to pursue other interests, including working with entrepreneurial start-up businesses and investing in “disruptive ideas”.
Rackspace have hired a recruitment consultancy that specialise in executive appointments to begin an extensive search for the long-term successor. The new CEO will be faced with reinvigorating a company that has projected revenue growth of between 2% and 3.5% in a “seasonally lower” first quarter, and that is struggling to attract new customers following the launch of a drastically redesigned cloud-computing platform.
By Daniel Price
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