Rackspace Customers Face Substantial Email Hosting Price Surge
Rackspace, a major player in email hosting, has recently enacted significant price increases for its services. Customers, particularly reseller partners, are expressing deep concern over the abrupt changes, describing them as detrimental to their businesses. This situation marks a notable shift in Rackspace’s pricing strategy, impacting users extensively.
New Email Hosting Pricing Structure
The latest adjustments to Rackspace’s email hosting pricing are considerable. The standard plan now costs $10 per mailbox per month. Additionally, businesses have the option to purchase add-ons:
- Rackspace Email Plus: $2 per mailbox per month.
- Archiving Add-on: $6 per mailbox per month.
These add-ons provide features such as file storage, mobile sync, and unlimited storage for archiving purposes. This stands in stark contrast to Rackspace’s pricing from November 2025, when the standard plan was only $3 per mailbox per month.
Impact on Reseller Partners
Reseller partners have been notably vocal regarding the repercussions of the price hikes. Scott Beale, the founder of the Rackspace reseller Laughing Squid, disclosed that the price increase amounts to a staggering 706 percent. Beale stated that he received this “devastating” news through email, with only a month and a half’s notice.
In 2019, Laughing Squid experienced a more moderate price increase of 55 percent. Beale emphasized that this latest surge has critically affected their profitability, as email has now become the company’s largest expense.
Customer Responses and Concerns
Feedback from other Rackspace partners indicates that some are facing price increases between 110 percent and nearly 500 percent. Reports highlight that the new pricing structure does not incorporate any volume discounts.
As the email hosting landscape evolves, the ramifications of Rackspace’s new pricing strategy may set a precedent for future changes in the industry. Resellers and customers alike are left to evaluate the long-term impacts on their operations amidst these substantial cost increases.
