All products
Rackspace’s Email Hosting Price Hike: A Devastating Blow to Partners
Rackspace, a well-established player in the email hosting services market, has recently introduced new pricing for its email hosting services, leaving its partners reeling. The updated pricing, which includes a standard plan of $10 per mailbox per month, has been termed “devastating” by a partner who has been using Rackspace as its email provider since 1999. The price increase has sparked widespread concern among Rackspace’s reseller partners, who are struggling to come to terms with the new costs.
A Significant Price Increase
The new pricing structure represents a significant departure from Rackspace’s previous pricing model. As recently as November 2025, the company charged $3/mailbox/month for its Standard plan, with an extra $1/mailbox/month for the Email Plus add-on, and an additional $3/mailbox/month for the Archival add-on, according to the Internet Archive’s Wayback Machine. The updated pricing has resulted in a whopping 706 percent increase, with some partners reporting increases of up to 500 percent.
Impact on Partners
Rackspace’s reseller partners have been particularly vocal about the impacts of the new pricing. Laughing Squid, a web hosting service provider and Rackspace reseller, has expressed its concerns in a blog post, stating that the price increase has a major impact on their ability to make money. The company’s founder, Scott Beale, told Ars Technica that he received the “devastating” news via email, with only a month-and-a-half’s notice. The last time Rackspace increased Laughing Squid’s email prices was by 55 percent in 2019.
Online reports suggest that Rackspace partners are being quoted email pricing increases of 110 percent to nearly 500 percent, with the new, higher-per-mailbox quotes not including volume pricing discounts. Beale noted that Laughing Squid’s quote doesn’t include discounts that the company previously received.
Conclusion
The price increase has significant implications for Rackspace’s partners, who are struggling to adapt to the new costs. As the email hosting market continues to evolve, it remains to be seen how Rackspace’s partners will respond to the price hike. For more information on Rackspace’s new pricing, read the full article Here
Image Credit: arstechnica.com