Rackspaceās revised pricing structure for its email hosting services has been labeled as 'devastating' by one of its partners, who has relied on Rackspace's email solutions since 1999.
In a recent update, Rackspace announced changes to its email hosting fees. The standard plan now costs $10 per mailbox per month. Additional services are available, including the Rackspace Email Plus add-on for an extra $2 per mailbox monthlyāoffering features like file storage, mobile synchronization, Office-compatible applications, and messagingāand the Archiving add-on for $6 per mailbox per month, which provides unlimited storage.
Historically, Rackspace's rates were much lower. As of November 2025, the cost was $3 per mailbox each month for the Standard plan, $1 for the Email Plus add-on, and $3 for the Archiving add-on, according to data from the Internet Archiveās Wayback Machine.
Reseller partners, who market Rackspaceās services, have expressed significant concerns regarding the pricing changes.
Laughing Squid, a web hosting service provider and Rackspace reseller, highlighted the issue in a blog post on Thursday, stating that the company is experiencing a '706 percent' increase in its email pricing with only a six-week notice period.
Scott Beale, the founder of Laughing Squid, conveyed to Ars Technica his dismay at receiving this news via email on Wednesday. He recalled that the last increase in Rackspace's pricing for them was 55 percent back in 2019.
'The price increase significantly affects our profitability, given that email has become our largest expenditure and considering the short notice period,' Beale explained to Ars.
There are numerous online reports indicating that other Rackspace partners are facing email pricing hikes ranging from 110 percent to nearly 500 percent. These reports also suggest that these new, higher-per-mailbox rates do not include any volume pricing discounts. Beale specifically pointed out that Laughing Squidās new pricing does not incorporate the previously available discounts.