Web hosting provider Rackspacereported on Tuesday the results of its third quarter earnings, which met market estimates and showed better-than-expected revenue due to strong growth at both its managed hosting and cloud businesses.

For the third quarter, the company's managed hosting revenue increased by 6 percent from the previous quarter to $147.1 million, while its cloud revenue increased by 17 percent to $15.3 million.

Overall, the third-quarter net income jumped from $5.2 million to $7.6 million, or 4 cents a share to 6 cents a share, when compared to a year earlier. This increase resulted in total revenue of $162.4 million -- an increase of 17 percent from the previous year.

Market analysts expected the company's earnings of 6 cents a share on revenue of $159.1 million, according to Thomson Reuters I/B/E/S. The company has forecast total capital expenditures of about $185 million for 2009.

Meanwhile, shares of Rackspace closed at $18.32 Monday on the New York Stock Exchange.

Rackspace also reported the results of a survey that highlight the growing problem of businesses struggling to cope with the demands of managing their own servers. More than half of the businesses surveyed responded that they would "love to never have to buy another server again."

Conducted by LoudHouse on behalf of Rackspace, the study the views of more than 441 IT managers at mid-size enterprises and revealed that approximately one third of their IT staff's time is spent on server management, which could limit their ability to focus on strategic initiatives that could benefit the business.

The study is used as way to promote Rackspace's newly launched No More Servers, a campaign and community that focuses on a more effective way of purchasing IT services and product.

The study is based on online surveys conducted in September, which asked the views of 441 US and UK-based IT decision-makers at companies with 100 to 500 employees.

Among other findings, the survey's respondents said that one third of their IT staff's time is spent on server management.

Fifty eight percent of respondents cited the "hassle of managing servers" as a challenge for their organization, while 61 percent said "time to drive innovation" was a challenge.

"IT should be an enabler," says Lanham Napier, president and CEO of Rackspace Hosting. "The survey seems to reveal that a huge chunk of time and resources are spent keeping the lights on and preventing problems. Rackspace, with its world class Fanatical Support, can free organizations from the hassle of server management and enable their IT teams to focus on strategic initiatives that will positively impact the business."

The survey also found that IT teams reported spending 60 percent of their time troubleshooting and managing servers, while spending only 27 percent of their time on strategic and value-add activities.

Fifty one percent of respondents said they have made mistakes in their server capacity planning, 15 percent said they have bought too many servers and 36 percent of respondents said they have failed to buy enough.

Thirty five percent of companies said they were "proactive and slightly ahead of the curve" when it comes to acquiring new technologies, while 28 percent remain "cautious and reactive."