Rackspace customers are facing a significant price increase for email hosting services, with some partners reporting increases as high as 706 percent. The new pricing structure, implemented in recent weeks, sets the standard plan at $10 per mailbox per month.
This represents a substantial change from Rackspace's pricing in November 2023, when the standard plan cost $3 per mailbox per month, according to data from the Internet Archive's Wayback Machine. Add-ons, such as Rackspace Email Plus (offering file storage, mobile sync, Office-compatible apps, and messaging) and Archiving (providing unlimited storage), now cost an additional $2 and $6 per mailbox per month, respectively. Previously, these add-ons were priced at $1 and $3 per mailbox per month.
Reseller partners have expressed strong concerns about the impact of the new pricing on their businesses and customers. Laughing Squid, a web hosting service provider and Rackspace reseller since 1999, stated in a blog post that the price hike was "astronomical" and implemented with only a month-and-a-half's notice.
The price increase has forced many businesses to re-evaluate their email hosting options. For smaller businesses, the increased cost per mailbox can represent a significant portion of their operating budget. Larger organizations with hundreds or thousands of mailboxes face potentially enormous increases in their IT expenditures.
Rackspace has not yet issued a formal statement explaining the reasons behind the price increase. The company's silence has fueled speculation among customers and partners, with some suggesting that the move is related to increased operational costs or a shift in business strategy.
The situation highlights the challenges businesses face when relying on third-party providers for essential services. Unforeseen price increases can disrupt budgets and force companies to make difficult decisions about their IT infrastructure. As of today, many Rackspace customers are actively exploring alternative email hosting solutions. The long-term impact of the price increase on Rackspace's customer base remains to be seen.
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