Rackspace Email Hosting Price Hike Devastates Customers

January 28, 2026 Rachel Kim – Technology Editor Technology

Here’s a breakdown of the key facts from the provided text regarding Rackspace’s price increases:

* Significant Price Hikes: Partners are reporting price increases ranging from 110% to nearly 500%.
* Extreme Case: One reseller, Laughing Squid, is facing a 706% price increase with only six weeks’ notice.
* Impact on Costs: Laughing Squid states that email is now their biggest operating cost due to the increase.
* Loss of Discounts: Previously negotiated volume discounts are no longer being applied.
* Rackspace’s Justification: Rackspace claims the increases are necessary to maintain service quality and ensure secure, business-class email.
* Long-Term Relationship: Laughing Squid had been a Rackspace customer for almost 27 years before this dramatic price change.
* Unprecedented Increase: Laughing squid emphasizes that while price increases have happened in the past, they have never been this substantial.