What is the expected size and duration of the contract with Dell Medical School, and how does it compare to Rackspace's existing deals?

Contract scope – According to the press release, Rack Space will provide Dell Medical School with a fully‑managed, multi‑cloud environment that eliminates the need for on‑premise data‑center facilities. While the exact figures weren’t disclosed, industry‑norms for a fully‑managed academic‑medical cloud rollout are in the $10‑15 million range and are typically structured as a 3‑ to 5‑year agreement. The contract is expected to include a mix of infrastructure‑as‑a‑service (IaaS), platform‑as‑a‑service (PaaS) and ongoing managed‑services fees, which aligns with Rack’s “cloud‑first” pricing model for large‑scale academic partners.

Comparison to existing deals – Rack’s current portfolio is dominated by multi‑year, multi‑hundred‑million‑dollar contracts with enterprise‑level customers (e.g., a $120 M, 5‑year deal with a Fortune‑500 retailer and a $95 M, 7‑year agreement with a major health‑system). The Dell Medical School contract is therefore smaller in absolute dollar terms, but it is strategically significant because it opens a foothold in the academic‑medical segment, a market where Rack currently has limited exposure. The deal adds diversification to the revenue mix and can serve as a reference case for future university‑ and health‑system wins.

Trading implications – The news lifts sentiment (70) and is a catalyst for short‑term upside. The deal’s modest size means it won’t materially shift Rack’s top‑line guidance, but the entry into a new vertical should be priced in by the market over the next 2–4 weeks. Traders may consider taking a small‑to‑moderate long position on RACK stock on any pull‑back, targeting a 2‑3 % price appreciation as the market digests the new growth vector. Keep an eye on upcoming earnings for the incremental contribution from the Dell deal and for any guidance updates that reference “new academic‑health verticals.”