Rackspace tests customer loyalty with brutal email price hike
- Reference: 1768921629
- News link: https://www.theregister.co.uk/2026/01/20/rackspace_price_changes/
- Source link:
Complaints were loud and clear following the increases. The company's retail [1]pricing for email, for example, went from $2.99 per mailbox per month in November 2025 to $10 per mailbox per month in January 2026.
In both instances, the company cheerfully said: "Get world-class business email at a fraction of the cost of other platforms."
[2]
The Register asked Rackspace to justify the increase, particularly since the product appears unchanged: 25 GB mailboxes, 30 GB file storage, and a 100 percent uptime guarantee. Unless, of course, [3]the company is hit by a "security incident" like the one that downed its hosted Exchange environment.
[4]
[5]
Rackspace has yet to respond, but its customers are less than impressed with the increase and the abrupt manner in which arrived. One volume reseller [6]said : "My monthly bill just went from $2,400 a month to $5,100 a month. A $2,700 a month increase."
Another, who claimed to have been a customer for more than 13 years, was also angered, [7]saying : "Really? This is how they treat long-term clients? I guess I now need to dick around finding a new provider."
[8]Rackspace moving some of its own workloads off VMware to address bigger Broadcom bills
[9]Rackspace is back with a seat on the OpenInfra Foundation board
[10]Rackspace runs short of Cloud Files storage in LON region
[11]How much to clean up a ransomware infection? For Rackspace, about $11M
Rackspace took to X (formerly Twitter) to explain itself, [12]posting : "We know price changes can be frustrating. This decision wasn't made lightly and reflects the ongoing costs of operating and maintaining the service."
The company suggested that disgruntled customers chat with a support specialist after submitting a ticket through its Control Panel.
[13]
The [14]response was about as measured as you would expect, particularly after such a big jump: "'Frustrating' doesn't cover it. A 400 percent price increase with little over a month's notice would be bad enough for B2C. But for resellers who you KNOW will be burdened with massive cost and/or admin to off-board, you've basically said a giant 'fuck you, we don't care'."
Independent hosting service Laughing Squid Hosting responded by separating email hosting from its pricing and suggested customers consider an alternative email provider to save costs. It [15]said : "After almost 27 years using Rackspace as our email provider, they have suddenly announced that they are increasing our email pricing by an astronomical 706 percent, with only a month and a half's notice.
"There have been reasonable price increases over the years as expected, but nothing like this."
[16]
Rackspace told El Reg that it had to increase prices, but that customers who are unhappy should call its support line to check their options.
"Our mission is to deliver a quality, trusted and reliable hosted email solution for businesses," the company said. "We are committed to delivering top-tier email services backed by our award-winning Fanatical Support." ®
Get our [17]Tech Resources
[1] https://www.rackspace.com/applications/rackspace-email
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aW-0v07lnxrSRDd2pRkJWwAAAA0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/12/05/rackspace_hosted_exchange_security_update/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW-0v07lnxrSRDd2pRkJWwAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aW-0v07lnxrSRDd2pRkJWwAAAA0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.reddit.com/r/rackspace/comments/1qd0nee/comment/nzophyo/
[7] https://www.reddit.com/r/rackspace/comments/1qd0nee/comment/nzmet7a/
[8] https://www.theregister.com/2025/02/05/rackspace_vmware_planet9_migration/
[9] https://www.theregister.com/2024/10/23/rackspace_openinfra_board/
[10] https://www.theregister.com/2023/11/30/rackspace_runs_short_of_cloud/
[11] https://www.theregister.com/2023/11/16/rackspace_ransomware_expenses/
[12] https://x.com/Rackspace/status/2013290335330251160
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW-0v07lnxrSRDd2pRkJWwAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://x.com/essensusltd/status/2013306002511216966
[15] https://laughingsquidhosting.wordpress.com/2026/01/15/irackspace-email-pricing-increase/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aW-0v07lnxrSRDd2pRkJWwAAAA0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[17] https://whitepapers.theregister.com/
Er, take it you didn't read the one about Microsoft running loss-leading services to encourage dependency?
Part of the USA's GDP 'growth'
The same thing costs three times as much. Rackspace can afford to lose some customers who won't pay the increase. At least some will remain.
Have Broadcom taken them over too?
This seems like it's straight out of the Broadcom pricing playbook: calculate the sweet spot between churn and profit, and raise your prices accordingly.
There will, as with VMware, be people who simply cannot be bothered to leave and as a result will not.
Less customers for the same (or more) money.
So this is why my ISP has dropped email hosting...
Proton ?
I've been looking to de-Google my email and I suspect I'll be going to Proton Mail at some stage. Tried it out and there are a few issues over speed and search, but those are a direct result of it being very secure - everything is encrypted on the server. To search content it has to download a copy onto your device.
Prices are comparable - €11/month for business email, €15 for the full suite (1TB cloud, VPN, Calendar, Mail, 2FA authenticator app, password manager) - multiple email addresses included. 30 day free trial - I got a refund when I decided 'not just yet'
Personal prices are £95/year for the full works
Has import from other provider options.
Oh yes, and based in Switzerland!
Re: Proton ?
Tuta...
Re: Proton ?
Mailbox.org – developed and hosted in Germany should also get a shout. E-Mail is fantastic, online "office clients" sort of what you'd expect. WebDAV for storage is, unfortunately, predictably flaky.
But Fastmail also has plenty of fans for good service.
Fastmail
I tired Proton, but bailed within the month. Too many little hassles. Went to Fastmail instead - New Zealand. More flexible in use.
Gotta pay off that leveraged buyout debt somehow.
A 400 percent price increase
I think someone's needs to remind themselves about percentages as it's only a 235% increase. (Give or take a decimal point)
Rackspace STILL offer hosted email?
Astounded to hear they still have both a hosted email offering AND customers for the platform.
Wouldn't be surprised if this is the final push needed to encourage their remaining customers to jump ship to, well, any of the various other services available !
(checking notes) - not really feeling much sympathy.
If* you are running a grown up business then you will have worked out the risks of things that you can't control and have a compensating control in place to show that you are doing due diligence and looking after precious shareholder dollars.
If not owning your own email hosting wasn't flagged as a risk with an exit strategy then you are learning the hard way.
*The original laconic reply.
...at a fraction of the cost...
Mathematically sound - it's just the numerator got a little larger than the denominator.
Re: ...at a fraction of the cost...
and that's very improper
"Get world-class business email at a fraction of the cost of other platforms."
"25 GB mailboxes, 30 GB file storage"
Maybe true for the previous pricing, but at 10$ that's a plain old lie! Even MS365 Business Basic only costs $6, which has 50GB (soon 100GB) mailboxes, and 1TB of OneDrive storage, and web versions of Office apps. You have to do some serious mental gymnastics to make your own offer sound like a better deal.
Don't even get me started on a price increase of that magnitude at such short notice...