Rackspace’s Significant Email Hosting Price Increase: What Businesses Need to Know
Recently, Rackspace made a controversial move by updating its email hosting pricing, sparking significant concern among its partner businesses. A company that has relied on Rackspace since 1999 expressed this concern, describing the new pricing structure as “devastating.”
New Pricing Structure Explained
Rackspace’s updated pricing now stands at $10 per mailbox per month for its Standard plan. For those looking for additional features, the Rackspace Email Plus add-on is available for an extra $2 per mailbox per month, offering tools like file storage, mobile synchronization, Office-compatible applications, and messaging services. Moreover, the Archiving add-on, which provides unlimited storage, increases the cost by an additional $6 per mailbox per month.
In stark contrast, just a year prior, in November 2025, the cost for the Standard plan was only $3 per mailbox per month, with the Email Plus add-on adding another $1, and the Archival add-on costing an additional $3. This substantial increase has raised eyebrows throughout the industry and has become a focal point of concern.
Feedback from Partners
Reseller partners of Rackspace, in particular, have been vocal about the new pricing’s effects. A blog post by Laughing Squid, a web hosting service provider and Rackspace reseller, highlighted the staggering increase of 706% in their email pricing, a figure that has left many partners reeling. Scott Beale, founder of Laughing Squid, noted that he received this “devastating” update via email just a week ago. He further indicated that the last significant increase, back in 2019, was a much smaller 55%.
Beale stated, “The price increase has a major impact on the ability to make money due to the fact that email is now our largest expense, and we were only given a month-and-a-half notice.” This sentiment is echoed among other partners who have reported price hikes ranging from 110% to nearly 500% in some cases, with new per-mailbox quotes failing to account for previously negotiated volume pricing discounts.
The Industry Response
As businesses digest these changes, the broader community’s response has been one of concern and disbelief. Reports from various partners signal a trend where email hosting expenses can no longer be predicted with confidence, leaving many to reconsider their long-term commitments to Rackspace. Such volatility in pricing can lead to significant operational strain, especially for small to medium-sized businesses that may rely heavily on email communications.
With the new pricing structure currently in place, it remains to be seen how Rackspace will address the backlash from its partners and if further adjustments or justifications will be forthcoming. For many businesses, the future of their email hosting choice may be up for reevaluation.
For more detailed insights on this issue, you can check the full article on Ars Technica Here.
Image Credit: arstechnica.com
