Bank of America Comments on How Customers View Rackspace and Amazon

Customers that Bank of America spoke with thought of Rackspace Hosting, Inc (NYSE: RAX) and Amazon.com Inc. (NASDAQ: AMZN) “targeting somewhat different segments within the broader infrastructure market.”

“Given the broader adoption of the infrastructure segment, it seems to us that there's room for both players and it may not be a winner-take-all market,” Bank of America writes. “Some customers we spoke with preferred Rackspace over Amazon due to the high-touch differentiation and better support.

“On the flip side, some customers sided with Amazon given the ease of spinning up instances and relatively lower cost. This was echoed by CTO Vogels who mentioned that AMZN was in the high volume low margin business. Some customers considered using both Amazon and Rackspace so as to not put all the eggs in one basket. Some of the common applications that customers moved to the Cloud are customer facing web apps, dev test, customer training sites, demo portals, and digital and content management.”

Amazon closed Tuesday at $194.23; Rackspace closed at $40.05.