“We had truly great reseller prices that we worked out with Rackspace due to the variety of mail boxes we had with them and the length of time we had actually been a consumer. All of that appeared to disappear when they informed us of their brand-new prices,” he stated.

Ars called Rackspace inquiring about the 706 percent cost trek that Laughing Squid states it’s dealing with, why Rackspace chose to increase its costs now, and why it didn’t provide its partners advanced notification. A business representative reacted, stating:

Rackspace Email is a trusted and safe business-class e-mail option for small companies. To continue providing the service levels our clients anticipate, efficient March 2026, Rackspace Technology is increasing the rate of Rackspace Email. We have an assistance group offered to assist our consumers to discuss their choices.

The representative included that Rackspace’s “objective is to provide quality, relied on and trustworthy hosted e-mail service for companies.”

Email hosting is a hard organization

Regardless of Rackspace’s mentioned dedication to email hosting, the excessive prices appears like a deterrent for a company being considered as high-effort and low-margin. Email has actually grown complex throughout the years, needing time and proficiency for correct management at scale. It’s ended up being easier, or more financially rewarding, for some cloud business to concentrate on offering their handled services on top of offerings like Microsoft 365– as Rackspace does– or Google Workspace and let the bigger business behind those services handle facilities expenses and intricacies.

Rackspace’s cost walking likewise comes as an AI-driven RAM scarcity is affecting the schedule and price of other computing parts, consisting of storage.

With Rackspace, which went public in 2020, likewise having actually given up hosting Microsoft Exchange following an expensive 2022 ransomware attack, the Texas-headquartered business might be aiming to lessen its e-mail hosting tasks as much as possible.

Chuckling Squid is increasing costs for Rackspace mail boxes and using services with a various e-mail supplier, PolarisMail, to consumers at lower rates. Beale stated he has actually reached out to Rackspace about the brand-new rates however hasn’t heard back.