Roundup: IBM, Rackspace, Level 3, VMware

Here’s a roundup of this week’s headlines from the data center and hosting industry:

Rackspace surpasses 2 million email users. Rackspace Hosting (RAX) announced the company has more than two million paid users of its hosted email offerings, including its proprietary Rackspace Email, hosted Microsoft Exchange and a hybrid offering of the two services. The hybrid offering mixes the two types of email services for a single domain, giving the customer flexibility within their user base. “We wanted to take advantage of a business class cloud-based email system that many providers couldn’t offer. Many of our users wanted the same user experience as Microsoft Outlook and access on mobile device,” said Kevin Durawa, IT Manager, RealtyUSA.com. “We are pleased with the ability to mix traditional Web and POP/IMAP clients with exchange depending upon the needs of our users." Much of the growth in email sales can be attributed to a strong reseller program and partner community at Rackspace.

Level 3 announces converged business network. Level 3 Communications (LVLT) announced the introduction of its Converged Business Network service, offering its enterprise customers a solution to handle all their voice, Internet and data networking needs through one carrier, one circuit and with one bill.  “In a globally competitive marketplace, enterprises must increasingly find new ways to optimize process and improve overall organizational efficiencies,” said Eric Paulak, managing vice president for Gartner, Inc. “Simplifying telecommunications services management has become a fundamental element in this endeavor, and providers that offer converged service solutions are well-positioned to capitalize on this trend.”  The new service is available in North America, includes services like dedicated internet access, virtual private network and Level 3 SIP trunking voice services.

IBM reports third quarter results.  IBM announced third quarter 2010 results Monday with revenue up 3 percent at $24.3 billion. Diluted earnings were up 18 percent at $2.82 per share. "In the third quarter we grew revenue in our hardware, software and services businesses, expanded margins and again increased earnings per share at double digits," said Samuel J. Palmisano, IBM chairman, president and chief executive officer. Software revenues were up 1 percent at $5.2 billion and hardware revenues up 10 percent at $4.3 billion. IBM ended the third quarter with $11.1 billion of cash on hand.

VMware reports third quarter results. VMware (VMW) announced financial results for the third quarter 2010.  Revenues for the third quarter were $714 million, with a U.S. revenues gaining 47 percent at $362 million. VMware had $2.9 billion in cash and cash equivalents on hand at the end of the quarter. “VMware’s third quarter results were driven by strong demand across products and regions, led by the U.S. Federal sector,” said Mark Peek, chief financial officer. “For the fourth quarter, we expect total revenues to be within a range of $790 and $810 million, an increase of 30% to 33% from 2009.”  VMware had a big quarter with a number of announcements during VMWworld 2010.