Rackspace, one of the largest hosting companies in the US, increased the number of servers as well as the number of customers its servers support during the first quarter of 2011. The company reported higher revenues and income, compared to the first three months of 2010 and moved to expand its cloud business.

Rackspace reported net income of US$13.8m on $230m in sales for the first quarter. Quarterly income was up 40.0% year over year, and revenue was up 28.6%.

The number of customers the company serves went from about 130,300 at the end of the fourth quarter of last year to about 142,400 at the end of the first quarter of 2011.

Rackspace grew its server count form about 66,000 it had at the end of 2010 to about 70,500 machines at the end of this year's first quarter.

Rackspace CFO Karl Pichler said in a statement, "During the quarter we invested across the organization to drive higher growth as well as increase our service level capability and enhance our product portfolio."

Business highlights that took place during the quarter for Rackspace were all in the sphere of cloud computing.

In January, Rackspace launched a cloud-based infrastructure service in Europe, which since then has attracted more than 3,000 customers.

Another new service launched in the first quarter was Rackspace's load-balancing as a service. By distributing compute workload across multiple Rackspace servers, the service enables businesses to scale mission-critical applications safely or to build high-availability configurations quickly.

In March, the company started a business for training and certification of service-providers for deployment cloud environments based on the OpenStack architecture ÔÇô an open-source cloud architecture Rackspace has developed together with a number of other private- and public-sector organizations.