Rackspace: We'll remain independent

After months of evaluating strategic alternatives and being acquired, Rackspace said Tuesday that it will remain independent.

Shares promptly plunged about 18 percent in after hours trading.

The company declared "its commitment to remain independent." Rackspace also named Taylor Rhodes CEO. Co-founder Graham Weston will be chairman.

Rackspace: Can it outrun customer uncertainty as CenturyLink, others eye acquisition?

Rackspace boasts record Q2 revenue, outlook strong

Rackspace ramps up managed cloud services as IaaS competition starts to bite

Hybrid cloud: Which way will the balance tip between public and private?

Rackspace's plan is to focus on its managed cloud strategy, which will avoid price wars with the likes of Google and Amazon Web Services.

In May, Rackspace said it was approached by multiple parties exploring an acquisition. The company's board then evaluated its options.

During that evaluation, Rackspace shares would surge based on takeover speculation. Now that speculation is over. Rackspace said:

After a comprehensive review, the board decided to terminate M&A discussions. Based on Rackspace's reaccelerated revenue growth and its potential trajectory for the coming year, the board concluded the company is best positioned to maximize shareholder value by executing its strategy as the #1 managed cloud company.

Rackspace's strategic plan going forward revolves around courting enterprises looking to have the company manage their cloud infrastructure as well as the applications on top of it. Rackspace also said that it is starting to scale its customer base of 200,000 around the world.

Rhodes added that the company is confident in its third quarter outlook and second half of the year.