Rackspace tests customer loyalty with brutal email price hike

Mailbox costs leap overnight as longtime users vent their frustration

Rackspace is giving a masterclass in how to annoy customers after an eye-watering price hike for email hosting.

Complaints were loud and clear following the increases. The company's retail pricing for email, for example, went from $2.99 per mailbox per month in November 2025 to $10 per mailbox per month in January 2026.

In both instances, the company cheerfully said: "Get world-class business email at a fraction of the cost of other platforms."

The Register asked Rackspace to justify the increase, particularly since the product appears unchanged: 25 GB mailboxes, 30 GB file storage, and a 100 percent uptime guarantee. Unless, of course, the company is hit by a "security incident" like the one that downed its hosted Exchange environment.

Rackspace has yet to respond, but its customers are less than impressed with the increase and the abrupt manner in which arrived. One volume reseller said: "My monthly bill just went from $2,400 a month to $5,100 a month. A $2,700 a month increase."

Another, who claimed to have been a customer for more than 13 years, was also angered, saying: "Really? This is how they treat long-term clients? I guess I now need to dick around finding a new provider."

Rackspace took to X (formerly Twitter) to explain itself, posting: "We know price changes can be frustrating. This decision wasn't made lightly and reflects the ongoing costs of operating and maintaining the service."

The company suggested that disgruntled customers chat with a support specialist after submitting a ticket through its Control Panel.

The response was about as measured as you would expect, particularly after such a big jump: "'Frustrating' doesn't cover it. A 400 percent price increase with little over a month's notice would be bad enough for B2C. But for resellers who you KNOW will be burdened with massive cost and/or admin to off-board, you've basically said a giant 'fuck you, we don't care'."

Independent hosting service Laughing Squid Hosting responded by separating email hosting from its pricing and suggested customers consider an alternative email provider to save costs. It said: "After almost 27 years using Rackspace as our email provider, they have suddenly announced that they are increasing our email pricing by an astronomical 706 percent, with only a month and a half's notice.

"There have been reasonable price increases over the years as expected, but nothing like this."

Rackspace told El Reg that it had to increase prices, but that customers who are unhappy should call its support line to check their options.

"Our mission is to deliver a quality, trusted and reliable hosted email solution for businesses," the company said. "We are committed to delivering top-tier email services backed by our award-winning Fanatical Support." ®