UPDATE 2- Rackspace upbeat on peer consolidation, sees strong FY

* Q1 adj EPS $0.10 vs est $0.11

* Q1 rev $230 mln vs est $226.3 mln (Adds conference call details)

May 9 (Reuters) - Rackspace Hosting Inc sees strong growth this year on addition of customers and higher demand for Web-based storage, and said it could gain from the recent consolidation among its peers.

The company, which provides managed hosting services, has been speculated as an attractive acquisition target after its rivals Savvis Inc and Terremark Worldwide Inc were lapped up by bigger technology firms looking to cash in on the growing demand for cloud services. [ID:nL3E7FT1ZD]

"The deals have changed the industry, ... and we are the last one standing," Lanham Napier, chief executive said on a conference call with analysts.

Napier said peer consolidations gave the company more opportunities as competition dissolved.

Hosting companies like Rackspace usually own or lease space on a server for use by their clients, typically in a data center -- large warehouses lined wall-to-wall with powerful storage servers.

Demand is driven by the growth in telecom and cloud computing -- an increasingly popular technology that allows remote access to computing power and data over the Internet.

The company expects 2011 revenue growth to better last year's 24 percent, as it adds customers and from its new product OpenStack -- a collection of open-source technologies that helps in deployment of software online and provides support to business.

Since OpenStack's launch in March, Rackspace has added more than 300 customers, the company said.

January-March net income came in at $13.8 million, or 10 cents a share, compared with $9.8 million, or 10 cents a share, a year ago.

Analysts on average were expecting earnings of 11 cents a share, according to Thomson Reuters I/B/E/S [ID:nASA023TS]

Shares of the San Antonio, Texas-based company closed at $43.27 on Monday on the New York Stock Exchange. (Reporting by Siddharth Cavale in Bangalore; Editing by Joyjeet Das)