Rackspace has rolled out new pricing for its email hosting services, and it’s hit many partners hard. One long-time partner, using Rackspace since 1999, called the changes “devastating.”
Not too long ago, Rackspace updated its email hosting rates. The standard plan now costs $10 per mailbox each month. If businesses want extra features, they can opt for the Rackspace Email Plus add-on for an additional $2 per mailbox per month, which includes file storage, mobile sync, Office-compatible apps, and messaging. There’s also an Archiving add-on priced at an extra $6 per mailbox each month for unlimited storage.
Back in November 2025, however, the charges were much lower: $3 per mailbox for the Standard plan, and just an extra $1 for Email Plus and $3 for Archiving, according to the Internet Archive.
Rackspace’s partners are particularly upset about this price hike. A blog post from Laughing Squid, a web hosting service and Rackspace reseller, described the increase as an astronomical 706 percent with just a month-and-a-half of notice. Founder Scott Beale shared that he learned about the hike in an email, adding that the last increase of 55 percent in 2019 was already a tough pill to swallow.
Beale pointed out that this new pricing hit them hard, making email their largest expense and raising concerns about profitability. Online discussions reveal that some partners have seen quotes rise anywhere from 110 to nearly 500 percent, excluding volume pricing discounts that may have been available before.
Amid this turmoil, it’s worth noting that significant price hikes in tech services are not new. Over the past decade, many companies, from cloud services to software providers, have adjusted prices as they adapt to market changes. Industry experts suggest that inflation and increased operational costs are often responsible for such shifts in pricing. For example, according to Statista, the cost of cloud services has risen by nearly 50% since 2020 due to supply chain disruptions and increased demand.
This situation illustrates the tightrope that service providers and their partners walk. With changing costs and customer expectations, pricing structures can evolve rapidly. It’s crucial for businesses to stay informed and flexible in this landscape.
