Rackspace Managed Hosting will invest $100 million to transform a vacant San Antonio shopping mall into its new headquarters, and plans to add 4,000 new employees over the next five years. The plans were announced this week as part of a deal to keep Rackspace in the San Antonio area, which included a $22 million grant from the Texas Enterprise Fund.

Rackspace is finalizing an agreement to lease the Windsor Park Mall in Windcrest, a suburb of San Antonio. The company has called San Antonio home since it was founded by three students from Trinity College, and organized as Rackspace in 1998.

"The Governor's Texas Enterprise Fund grant was the key factor in Rackspace's decision to keep its company headquarters in San Antonio and build out a new campus within Windsor Park Mall," said Graham Weston, executive chairman of Rackspace Managed Hosting. "We look forward to San Antonio being our home for years to come."

Rackspace is one of the world’s largest managed hosting specialist, with more than 920,000 hostnames housed on its network of six data centers. The company has become known for its strong brand, built on industry-leading reliability and a commitment to "Fanatical Support." Rackspace has been a top performer in Netcraft's monthly ranking of the most reliable web hosts, topping the survey six times in 2006 and twice thus far in 2007.

Rackspace had revenue of $75.2 million and positive net income in the first quarter of 2007, when it signed more than 900 new customers. On May 23 the company announced $70 million in financing to support future hardware purchases and expansion of its data center network.