Rackspace to raise email-hosting prices; partner reports hikes up to 706%

Rackspace Technology will raise the price of its Rackspace Email product effective March 2026, a change partners and customers say will be steep — Laughing Squid says it faces a 706 percent hike, and one reseller said previously negotiated reseller pricing “seemed to vanish” after Rackspace notified them of the new pricing.

Ars contacted Rackspace asking about the 706 percent price increase Laughing Squid says it faces, why the company chose to increase prices now, and why partners were not given more advanced notice. A company spokesperson responded, saying Rackspace Email is “a reliable and secure business-class email solution for small businesses,” that the price increase will take effect in March 2026, and that “we have a support team available to help our customers to discuss their options.” The spokesperson added Rackspace’s “mission is to deliver quality, trusted and reliable hosted email solution for businesses.” The coverage notes that email hosting has become complex and can be high-effort and low-margin, leading some providers to focus on managed services built on platforms such as Microsoft 365 or Google Workspace.

The report also cites an AI-driven RAM shortage affecting the availability and affordability of computing components, and recalls that Rackspace quit hosting Microsoft Exchange after a costly 2022 ransomware attack; Rackspace may be looking to minimize its email-hosting duties, the article says.

Key Topics

Tech, Rackspace, Rackspace Email, Laughing Squid, Polarismail, Texas