Rackspace email hosting price hike will be 'devastating', customers say

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Rackspace standard plans are now $10/month, up from $3
Laughing Squid was faced with a 706% price hike and six weeks' notice
The extra charges will go towards maintaining service quality

Rackspace customers and long-term partners have warned changes could be "devastating" following a sharp rise in prices for the company's email hosting.

The standard plan now costs $10 per mailbox per month, up from $3. Charges for the Email Plus (+$2, from +$1) and Archiving (+$6, from +$3) add-ons have also put extra strain on customers.

A number of partners have reported increases ranging from 110% to nearly 500%, and volume discounts don't seem to be there to soften the blow.

Rackspace price hike

One reseller, Laughing Squid, says its pricing is rising by 706% with only six weeks' notice. Founder Scott Beale explained (via Ars Technica) that email is now Laughing Squid's biggest operating cost, adding that previously negotiated volume discounts seem to have been pulled.

Rackspace defended the increases, noting the income is needed to maintain service quality and promising a commitment to secure, business-class email.

"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%," Laughing Squid noted in a blog post. "There have been reasonable price increases over the years as expected, but nothing like this."

The company is also working with PolarisMail to reduce costs, which would otherwise be passed on to customers.

"To continue delivering the service levels our customers expect, effective March 2026, Rackspace Technology is increasing the price of Rackspace Email. We have a support team available to help our customers to discuss their options," a Rackspace spokesperson shared.

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With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!

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