Key Takeaways
Rackspace is raising the price of its email hosting service in March, nearly tripling the cost from around $3 per mailbox to $10. That’s more than a 200% increase, and legacy discounts will also be eliminated as part of the change.
| Plan | Old Price | New Price | Percentage Increase |
|---|---|---|---|
| $2.99 | $10.00 | 234.45% | |
| Email Plus | $3.99 | $12.00 | 200.75% |
| Archiving | $3.00 | $6.00 | 100% |
Customer reaction has been largely furious, to say the least. Many say they’re on the hunt for a new email provider. Others expressed that this just seems like an unreasonable hike.
“I understand stuff gets more expensive over time. I didn’t balk at the $1/month increase to my service last year. However, to just suddenly increase my monthly bill to more than 3x is just insane,” wrote one Redditor on the r/rackspace subreddit.
Rackspace said the reason behind the increase is rising operational costs:
“To support the ongoing costs of operating and maintaining the service, we are adjusting pricing for your Rackspace services. The price for Rackspace Email will increase effective March 2026. We have a support team available to help you discuss your options.”
RANT 300% price increase. Is Rackspace the new Broadcom
byu/Glass_Employment_685 inrackspace
Folks received the email last week giving them six weeks to decide whether they’re staying and absorbing the cost or want to migrate away. For agencies and resellers managing email for dozens or hundreds of clients, six weeks is barely enough time to plan a migration, let alone execute one.
One customer who reached out to Rackspace said they received a generic response. The support agent repeated rising costs and the need to maintain “security, reliability, and support infrastructure,” but did not address the actual concerns around the increase and short notice.
Why Email Hosting Keeps Getting More Expensive
Email hosting itself is now difficult to justify as a standalone service, especially in this era of heighted cyberattacks.
Statista shows that the most common cyber threats for businesses are phishing, vishing, or smishing. These aren’t all reliant on email as the gateway, but phishing is the leading issue, which explains why business inboxes are such an important point of entry. And now advanced scammers are leveraging AI to get past basic filters.
Business email compromise (BEC) scams are among the most expensive types of cyberattacks, costing organizations an average of about $4.9 million per incident, so taking those extra security precautions is really not up for debate.
It’s also not cheap, so that’s also a major reason so much email hosting has consolidated into larger ecosystems like Google Workspace and Microsoft 365, where the cost of email is subsidized by high-revenue products like their productivity tools and collaboration software.
It just doesn’t look the same for a provider the size of Rackspace.
“ExRacker here, email stopped being profitable after Microsoft launched Office 365, it is not a core part of their business,” one Reddit commenter wrote. Another agreed: “I worked at Rackspace Email for almost a decade and I still believe management doesn’t want to invest or grow this platform.”
This is going to hit resellers hard, too — many built their businesses around the traditionally predictable email prices that were easy to bundle into bigger hosting packages.
It’s going to be a rough six weeks.
