Rackspace Hosting Inc. Drops On Google Cloud Price Cut

Rackspace Hosting Inc.

fell sharply on Tuesday after Google Inc.

vowed to slash prices on cloud-based services. Google is in third place in the fast-growing cloud services sector, far behind market leader Amazon.com Inc.'s

web services and significantly below Microsoft Inc. Although competition from Rackspace may not count for much in Google's pricing equation, Rackspace says it's increasingly face competition from the likes of Amazon, Microsoft, and yes, Google, who are making substantial investments in cloud computing. Google said it will cut prices by 25 percent for its SQL-based cloud service and by even more for certain other services. http://googleforwork.blogspot.co.uk/2014/11/google-cloud-platform-live-introducing.html Google's move is just the latest in a price war that broke out earlier this year when both Google and Amazon cut prices sharply. Microsoft followed suit in April. Perhaps coincidentally in May, Rackspace hired investment bankers to review alternatives. But in September, the company announced it planned to remain independent. Rackspace shares have gained 25 percent in the past three months but closed down Tuesday 1.5 percent at $37.94 a share.