Rackspace raises email hosting prices by as much as 706 percent

In a shocking move, Rackspace has drastically raised its prices for email hosting services, with some partners describing the changes as "devastating." This adjustment, which took effect recently, sees the standard email hosting plan jump to $10 per mailbox per month. For those looking for additional features, the Rackspace Email Plus add-on is available for an extra $2 per mailbox monthly, while the Archiving add-on comes at a cost of $6 per mailbox monthly, providing unlimited storage. Just two years ago, in November 2021, Rackspace’s pricing was significantly lower, with the standard plan priced at merely $3 per mailbox per month. The Email Plus and Archiving add-ons were also much more affordable at that time, costing $1 and $3 per mailbox per month, respectively, according to historical data from the Internet Archive's Wayback Machine. Reseller partners of Rackspace are particularly vocal about the repercussions of this steep price hike. A blog post from Laughing Squid, a web hosting provider and long-time Rackspace reseller, expressed frustration over the 706% increase, which they claim was communicated with just a month and a half's notice. Founder Scott Beale informed Ars Technica about receiving the troubling news via email on Wednesday. He noted that the last price hike in 2019 was only 55%, making this recent adjustment especially alarming. Beale emphasized that this surge in email hosting costs severely impacts profitability, as email services have now become their largest expense. Reports from other partners indicate that price increases range from 110% to nearly 500%, with many claims suggesting that these new rates do not factor in volume pricing discounts. Beale pointed out that the quote provided to Laughing Squid lacks the discounts they had previously enjoyed, further complicating the situation for resellers.