Rackspace tests customer loyalty with brutal email price hike

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 …

[SVD_NL]

"Get world-class business email at a fraction of the cost of other platforms."

"25 GB mailboxes, 30 GB file storage"

Maybe true for the previous pricing, but at 10$ that's a plain old lie! Even MS365 Business Basic only costs $6, which has 50GB (soon 100GB) mailboxes, and 1TB of OneDrive storage, and web versions of Office apps. You have to do some serious mental gymnastics to make your own offer sound like a better deal.

Don't even get me started on a price increase of that magnitude at such short notice...

[Charlie Clark]

Er, take it you didn't read the one about Microsoft running loss-leading services to encourage dependency?

[wolfetone]

Yeah, but it's still $4 a month less than Rackspace for the same thing!

[Charlie Clark]

That's why it's a "loss leader". All ISPs will tell you that their charges are based on what they have to pay Microsoft. Remove any kind of competition and watch those prices rise.

[Anonymous Coward]

Email is apparently the new thing to make money with. For over 20 years our hosting provider (USA) offered a number of email accounts for free with the hosting solution. Suddenly they decided to put a price tag (and not a timid one) on every mailbox. Needless to say we're moving, as this doubles the monthly fee...

[YetAnotherXyzzy]

Pair Networks, perhaps? I've been happy with Pair for 18 years, now suddenly this, and with not enough advance notice to do anything except delete less important mailboxes.

[Anonymous Coward]

Bingo...

[hx]

As someone that worked in the ISP/MSP space, I can tell you the costs have gone up, mainly thanks to spam filters. The hard no-wiggle-room costs for spam filtering per mailbox are about 10x per month what they used to cost for a whole year. The email is still literally free. You're just paying for the spam filtering. And if you think the spam filter isn't doing a good job, look at the quarantine, and then keep in mind what makes it there is still about 1% of what the spam filter blocked at an IP-level. And that's just for the ISP/MSP's hosted mail. If you want ~~O365~~ Microsoft CoPilot OneDrive 365 for Business Pro E7 with Teams, well, that's going to cost you real money.

[IGotOut]

Proton Unlimited. Same price if bought annually:

Proton Mail • 1 user with up to 15 email addresses

• 500 GB of total storage shared with Proton Drive

• Support for 3 custom email domains

• Short domain email address (@pm.me): send and receive messages

• Unlimited labels, folders, and filters

• Email client support (via IMAP/SMTP and Proton Mail Bridge)

• Contact groups

• Auto-reply

• Catch-all email

• Easy Switch import assistant

• Password-protected Emails

• Send as many emails as you want*

• Priority customer support

• Dark Web Monitoring

• Unlimited hide-my-email aliases

• Proton Sentinel account protection

Proton Calendar • 25 personal calendars per user

Proton VPN • Connect to VPN on 10 devices per user at the same time

• Highest VPN speed

• 13,000+ servers(new window) in 120+ countries

• NetShield Ad-blocker(new window)

• Worldwide streaming services

• P2P/BitTorrent support(new window)

• Secure Core servers(new window)

• Tor over VPN(new window)

• Strict no-logs policy

• Unlimited volume/bandwidth

• DNS leak prevention(new window)

• Kill switch/always-on VPN(new window)

• Encrypted VPN servers

• Router support

• Split tunneling (Android and Windows only)

Proton Drive • 500 GB of total storage shared with Proton Mail

• Proton Doc

Proton Pass • 50 vaults

• Unlimited hide-my-email addresses

Proton Wallet • 10 wallets with 10 accounts each

Proton Lumo Free • Limited usage

• Basic chat history

Seems a teeny bit better than their offering....

[897241021271418289475167044396734464892349863592355648549963125148587659264921474689457046465304467]

Yeah, like Proton pricing is going to stay still while stupid "AI" gobbles all the world's resources.

[retiredFool]

Interesting question

Is this price increase somehow subsidizing AI costs? I don't know, don't use rackspace. If they are in the AI biz, I could believe it though. People want email, ai not so much. So if you need revenue you have to get it where people want/need. I expect very few are willing to pay for ai.

[VoiceOfTruth]

Part of the USA's GDP 'growth'

The same thing costs three times as much. Rackspace can afford to lose some customers who won't pay the increase. At least some will remain.

[Ambivalous Crowboard]

Have Broadcom taken them over too?

This seems like it's straight out of the Broadcom pricing playbook: calculate the sweet spot between churn and profit, and raise your prices accordingly.

There will, as with VMware, be people who simply cannot be bothered to leave and as a result will not.

Less customers for the same (or more) money.

[Michael Hoffmann]

Re: Have Broadcom taken them over too?

"In August 2016, it was confirmed that the American private equity firm, Apollo Global Management, had reached an agreement to buy the company for $4.3 billion"

And then shoved on to the stock market.

So quite possibly even worse than Broadcom, if such a thing is possible!

[Lazlo Woodbine]

So this is why my ISP has dropped email hosting...

[Steve Davies 3]

Plusnet is dropping their ISP email service

in favour of a paid one.

I opted out.

I expect a lot of similar actions from all the usual suspects (Vermin, NoTalk etc)

FSCK the lot of them especially if you use POP and pull all your emails from them, your storage use is pretty small. I know that everyone should be using IMAP but some of us like to use emails off-line.

[doublelayer]

Re: Plusnet is dropping their ISP email service

It's not that you should use it, just that a lot of people probably want to because it does a lot of things better. If you don't want the things it does, there's nothing wrong with not using it. However, you should know that IMAP does work offline for everything that works offline. I've got local copies of mail using IMAP. Those automatically sync with the server when online because I want them to, but if the network goes down and I want to get something out of an email, I start my mail client and get it from the complete offline copy I also have.

[X5-332960073452]

Re: Plusnet is dropping their ISP email service

"IMAP does work offline for everything that works offline" - don't understand that, maybe one should have been online

And what happens if your IMAP sever thinks it has the latest version of your mailbox, and wipes your client version?

Have see it happen, better to keep a local mail store (and back it up!).

[doublelayer]

Re: Plusnet is dropping their ISP email service

That meant that, rather obviously, you can't get new messages or completely send ones when you're offline, but you can read messages, prepare messages for sending, etc offline. Perhaps a better phrasing is that there is not a single thing that POP3 can let you do offline which IMAP cannot let you do offline.

And if the server wipes my mail, then the server has a problem, which is when I'd use another machine's synced copy or the version backed up from that local copy I was talking about, but the more important problem would be fixing whatever caused the server to do that as I would have to if the server deleted my email before I could download it with POP3. I have also seen that, once, and it was an admin's fault. That wasn't POP3's fault, and whatever server problem you've experienced wasn't IMAP's fault either.

[Anonymous Coward]

Re: Plusnet is dropping their ISP email service

Several large UK based ISPs dropped email hosting for new customers about three years back, although generally if some still provide it for customer who signed up when it was offered. I recall my oldISP shared some figures on their user forums, that showed that just under 1% of broadband customers actually used the ISP email service.

I was one of the legacy customers, back to the very earliest days of said company, and provision should have stopped a few years back when I cancelled to move to a customer focused small ISP, but oldISP weren't very organised, so all my oldISP email addresses still work. Obviously doesn't pay to have anything important there, but its convenient, and I enjoy the fact that it's still costing oldISP a few quid a year.

[kmorwath]

Re: Plusnet is dropping their ISP email service

The problem with POP is that if you use a mailbox from multiple device or you leave the messages on the server anyway, or you don't have your emails on all devices. With IMAP emails can be synchronized across multiple devices easily.

Anyway, the mail provider can't know how many people will use POP or IMAP - and if they switch from one another one day - so they still have to size the mailbox for the space they sell.

[Jurassic.Hermit]

Re: Plusnet is dropping their ISP email service

With POP you can still set up your email client to keep a copy of the mails on the server for x number of days so that you can also view recent emails with several devices.

[Pen-y-gors]

Proton ?

I've been looking to de-Google my email and I suspect I'll be going to Proton Mail at some stage. Tried it out and there are a few issues over speed and search, but those are a direct result of it being very secure - everything is encrypted on the server. To search content it has to download a copy onto your device.

Prices are comparable - €11/month for business email, €15 for the full suite (1TB cloud, VPN, Calendar, Mail, 2FA authenticator app, password manager) - multiple email addresses included. 30 day free trial - I got a refund when I decided 'not just yet'

Personal prices are £95/year for the full works

Has import from other provider options.

Oh yes, and based in Switzerland!

[cd]

Re: Proton ?

Tuta...

[Charlie Clark]

Re: Proton ?

Mailbox.org – developed and hosted in Germany should also get a shout. E-Mail is fantastic, online "office clients" sort of what you'd expect. WebDAV for storage is, unfortunately, predictably flaky.

But Fastmail also has plenty of fans for good service.

[Jurassic.Hermit]

Re: Proton ?

I don’t want my emails hosted in the EU, too much snooping, not that I have anything to hide, but it’s the principle. Proton all the way.

[Charlie Clark]

Re: Proton ?

What snooping? If you want, you can encrypt at rest, it's not illegal. And any "snooping" requires a court order, not just a fax…

I've nothing against Proton but it has also handed over information when required by courts.

[Mark Allen]

Fastmail

I tired Proton, but bailed within the month. Too many little hassles. Went to Fastmail instead - New Zealand. More flexible in use.

[Pickle Rick]

IONOS

I went IONOS when I deGoogled/deUSAed, as they offer other services I use (eg. VPS, so bye bye DO too). They're German.

[Anonymous Coward]

Re: Proton ?

We're a long way from November but Proton will usully do huge savings for Black Friday, 75% etc. Would be worth looking at them through the year as I suspect they will have similar offers popping up.

[ICL1900-G3]

Re: Proton ?

I've recently moved to Proton. Perfectly happy so far.

[tony72]

Gotta pay off that leveraged buyout debt somehow.

[Like a badger]

It's a bigger problem than the debt, Rackspace sales are down about 10% in three years, and gross profit has halved in that time scale, and operating profit (ie before interest) has cratered from a thoroughly miserable $30m profit on $3bn revenues in 2021 to a loss of $174m on sales of $2.7bn for 2024 and more recent quarters are no better.

You are correct that it's even bleaker after interest and exceptional items, because after those costs Rackspace made a net loss of $218m dollars in 2021, and $858m in 2024. Most investors bailed years ago - back in May 2021 Rackspace had a market cap of $5.4bn, now it's worth $0.23bn, and credit ratings firmly in junk territory.

I would suggest that anybody being priced off the Rackspace platform is being done a favour.

[A Non e-mouse]

A 400 percent price increase

I think someone's needs to remind themselves about percentages as it's only a 235% increase. (Give or take a decimal point)

[Anonymous Coward]

Since the other reseller quotes a 700% increase, I figure wholesale prices must have jumped by an amount similar to retail prices, from a lower base…

[Anonymous Coward]

Rackspace STILL offer hosted email?

Astounded to hear they still have both a hosted email offering AND customers for the platform.

Wouldn't be surprised if this is the final push needed to encourage their remaining customers to jump ship to, well, any of the various other services available !

[Anonymous Coward]

(checking notes) - not really feeling much sympathy.

If* you are running a grown up business then you will have worked out the risks of things that you can't control and have a compensating control in place to show that you are doing due diligence and looking after precious shareholder dollars.

If not owning your own email hosting wasn't flagged as a risk with an exit strategy then you are learning the hard way.

*The original laconic reply.

[Richard 12]

Re: (checking notes) - not really feeling much sympathy.

Email and web hosting are commodities.

It's perfectly reasonable to buy them in, same as most companies don't make their own toilet paper.

[JimmyPage]

Re: (checking notes) - not really feeling much sympathy.

The PP didn't say they weren't.

They said if you are buying a commodity, then it's incumbent on you to have a plan to switch suppliers. And the more specialist the product, the more work you should put into that,

I am guess the downvotes come from the people who don't see that and then are surprised when their supplier shafts them.

All of a sudden the pisspoor UK productivity seems a little less mysterious. Clearly exacerbated by comprehension problems.

[Pickle Rick]

...at a fraction of the cost...

Mathematically sound - it's just the numerator got a little larger than the denominator.

[JessicaRabbit]

Re: ...at a fraction of the cost...

and that's very improper

[Paul Crawford]

Re: ...at a fraction of the cost...

I have an (ir)rational hatred of that...

[ChoHag]

Re: ...at a fraction of the cost...

I guess you have a real problem.

[Paul Crawford]

Re: ...at a fraction of the cost...

Yes, I failed to factor this in.

[anthonyhegedus]

I'll tell you when price changes aren't frustrating: when they only go up a bit at a time.

[Anonymous Coward]

American owned ?

"Our mission is to deliver..." profits to random people who bought a few shares, that they will sell after the dividend.

[Like a badger]

Re: American owned ?

Incorrect.

"Our mission is to deliver..." inflated short term profits solely to hit C-suite bonus targets.

[Not Yb]

I've often wondered why anyone would think "email service reseller" was a winning proposition.

What with so many free or cheap services available (including things like Protonmail) I've never understood why people thought 'reselling email addresses from another provider to customers" was a sane business plan.

It's cheap enough to run your own email server that people still do so. Large companies certainly can and do.

As they say in business school, what's the value proposition here?

[doublelayer]

Re: I've often wondered why anyone would think "email service reseller" was a winning proposition.

"As they say in business school, what's the value proposition here?"

Bundling, mostly. When some person wants a bunch of related tech services and doesn't know how to set any of them up, you can be their sole provider. Everything runs on the same stack you are used to, so your costs for providing those services are low. But running email isn't something you can provide value for, so you find someone else to subcontract that part to and just administer that along with the rest of the services. Instead of hiring mail admins to maintain the servers and keep them off spam lists, you let someone else do that.

I wouldn't like that approach. Among other things, I like it when the website and email are on different providers because it means I can use one of them to deal with an outage on the other. But I'm already not the customer they're looking for because I also don't like outsourced web hosting. I'll use outsourced servers, but I can run an HTTP server quite easily. There are a lot of people who can't and do appreciate having few things they have to set up, which is why the combined web host, email host, domain registrar, sometimes also business software like office or access management, provider still exists and gets small business customers.

[Not Yb]

Re: I've often wondered why anyone would think "email service reseller" was a winning proposition.

I think rackspace wants to get out of the email business, but not enough to just price out EVERYONE yet.

[Anonymous Coward]

Re: I've often wondered why anyone would think "email service reseller" was a winning proposition.

I assume they do want to price everyone out. A 40% increase might be price gouging with a longer term view but this kind of increase says ‘we don’t want to announce a shutdown as we may get lawsuits and be held responsible for some switching costs, but we want you to find a new provider right now please.’

Think about what happens after this. They’ll lose more than 50% of whatever customer base they have (larger volume buyers will have to switch and only mom and pop users with low total costs and little skill to switch will stay) and then the platform running costs will be even higher per user. Once they have too few users to run it at any sensible price point presumably they will then shut it down altogether a year from now but try to do it more quietly and with fewer people then affected so that it’s a smaller story with less brand and legal jeopardy.

[John 48]

Re: I've often wondered why anyone would think "email service reseller" was a winning proposition.

A 40% gouge might not be so bad... they emailed their customers on the reseller platform and said, new price is $4/month. No tiers - just flat rate across the board. So for resellers with a few hundred mailboxes that was a ~350% increase. For those on the 10,000+ tier that was a >700% increase. All with a month and a bit notice. This came a few weeks after they jacked their VPS hosting costs by 100% - again with only 1 month's notice.

[Dwarf]

On the positive side

When loads of customers walk away, they will have far more rack space.

When will companies learn that most customers are not hostages

[ecofeco]

Re: On the positive side

Never.

Because "market inertia" also known as customer inertia, is a real thing.

So they WILL screw the customer until they burn their customer base to the ground.

[Anonymous Coward]

Re: On the positive side

Very true that. It takes a lot to make a business move service, the bigger the business the bigger the inertia.

But that works both ways, you can milk them hard until they go, but if they do go they're not coming back.

[anatak]

Dreamhost is doing something similar

They hiked their prices for web hosting last year and this year they did it for email hosting. I ll be looking for a different provider.

Can anyone recommend a hosting provider (web, email, DNS) preferably not in the usa territory?

[Pussifer]

Re: Dreamhost is doing something similar

Krystal? Says UK based.

https://krystalhosting.com/

I'm a happy customer and so are a few of my customers.

[Roland6]

Re: Dreamhost is doing something similar

Cix.co.uk

Interestingly they are probably close to being a pure play email/forums business and so their pricing (£7.50 pcm) which has been maintained over several decades, is probably a good indicator of the actual costs of running a decent email service. Hence suspect Rackspace have decided to make email hosting a cover its costs plus profit rather than being a loss leader and getting cross subsidised.

Others include Mythic Beasts, Andrew’s & Arnold…

[DoctorPaul]

Re: Dreamhost is doing something similar

Check out Mythic Beasts based in Cambridge UK. A very happy customer, 3 quid a month (of which 50p is VAT) gets me all I need including catch-all email and pointing domains at things like my self-hosted Vaultwarden instance. Exemplary tech support as well.

[llaryllama]

If you have several hundred or more mailboxes to look after, why would you be working with a service that charges per mailbox?

There are thousands of companies around the world offering fully managed hosting for anything from a few tens to a few hundreds of $ per month (my recommendation goes to Bigscoots, not employed or sponsored by them).

Email is very easy to self manage and you have complete control over your data, it's very easy to migrate an entire virtual server to another provider.

[897241021271418289475167044396734464892349863592355648549963125148587659264921474689457046465304467]

AI is gobbling up all RAM, storage, materials for electronics, and chippery. Personal computing, email, and websites will become unaffordable for many. Perhaps for even The Reg. Server inflation contagion will be legion. "Freemium" offerings will disappear. Wish this damned bubble would burst already. Fucking stuff is mostly useless.

[Tim Kemp]

WHY!!!!!

We spend so much time extricating customers from email / domain lock-ins. At these prices you might as well have an exchange online mailbox. They are charging more than an exchange plan 2 for less storage than an exchange plan 1, and a business basic will get you the storage...

[_wojtek]

fuck off pricing

typical fuck off pricing...

I van recommend infomaniak - they have free mailboxes or VERY CHEAP paid ones ("unlimited") where you can host own domain. And they are from Switzerland so middle finger to usania BigTech...

[Ensign Nemo]

Fanatical Support

Translation: “We only support the fanatics”

[chrismitchell]

Use a Rackspace Email reseller partner

You can get around the price hike by using a Rackspace reseller. We switched to Greatmail a Rackspace reseller partner and got their $2.95/mailbox pricing for Rackspace Email. Price will stick after the March price increase. It's a Rackspace-to-Rackspace transfer so no downtime, no DNS changes and all your email client settings stay the same. No migration pain. Just transfer you domain from one admin panel to another