Rackspace Email Prices Surge: What Customers Need to Know

Rackspace Email Hosting Prices surge, Sparking outcry From Resellers

Rackspace’s recent and significant price increases for its email hosting services are causing critically important disruption for its partners, with one long-term client calling the changes “devastating.” The updated pricing structure, implemented in recent weeks, has left many resellers scrambling to adjust their own offerings and facing potential profit losses.

The changes dramatically increase the cost of providing email services through Rackspace.The standard plan now costs $10 per mailbox per month, a significant jump from the $3 per mailbox per month charged as recently as November 2025, according to data from the Internet Archive’s Wayback Machine. Customers can also opt for add-ons: Rackspace Email Plus, offering features like file storage and mobile sync, adds $2 per mailbox per month, while unlimited storage via the archiving add-on costs an additional $6 per mailbox per month.

Did you know? – Rackspace, founded in 1998, is a managed cloud services provider.It serves businesses of all sizes, offering services like cloud computing, dedicated servers, and email hosting.

Reseller Impact: A 706% Increase

The impact is being felt most acutely by Rackspace’s reseller network.Web hosting provider and Rackspace reseller, Laughing Squid, publicly detailed the price shock in a blog post on Thursday, stating that Rackspace is “increasing our email pricing by an astronomical 706 percent, with only a month-and-a-half’s notice.”

Scott beale, founder of Laughing Squid, explained the severity of the situation to Ars Technica, stating, “the price increase has a major impact on the ability to make money because email is now our largest expense, and we were only given a month-and-a-half notice.” Beale also noted that this is not an isolated incident, with the last price increase occurring in 2019, representing a 55 percent hike.

Pro tip – When selecting a third-party infrastructure provider, carefully review the service level agreement (SLA) and pricing terms. Look for clauses addressing potential price increases and contract renewal options.

Widespread Increases, Diminished Discounts

Reports circulating online indicate that Laughing Squid’s experience is not unique. Multiple Rackspace partners have reported email pricing increases ranging from 110 percent to nearly 500 percent. A key concern among resellers is that the new quotes do not include previously offered volume pricing discounts. Beale confirmed that Laughing Squid’s quote also lacks the discounts the company had previously received.

The sudden and substantial price increases raise questions about Rackspace’s long-term strategy for its email hosting business and the future of its relationships with its reseller partners. The lack of substantial notice and the removal of established discounts are adding to the frustration and uncertainty within the network.

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The situation underscores the growing challenges faced by businesses relying on third-party infrastructure providers and the importance of carefully evaluating long-term pricing commitments.

Why: Rackspace implemented substantial price increases for its email hosting services.
Who: The changes impact rackspace’s reseller network, particularly companies like Laughing Squid, and ultimately their customers.
What: Email hosting prices surged, with some resellers reporting increases between 110% and 706%. Volume discounts were also removed.
How did it end?: As of the article’s publication, the situation remains unresolved. Resellers are expressing frustration and uncertainty, and rackspace has not publicly addressed the concerns beyond the price changes themselves. The long-term outcome for rackspace’s reseller relationships and its email hosting business remains to be seen.