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What happened
Rackspace updated its email hosting pricing, setting the Standard plan at $10 per mailbox per month and offering add-ons priced at $2 and $6 per mailbox per month. Rackspace reseller Laughing Squid said it was quoted a 706 percent increase with about a month-and-a-half notice, and its founder said the change made email the company’s largest expense. Rackspace said it is increasing the price of Rackspace Email effective March 2026 to continue delivering expected service levels and that a support team is available to discuss customer options. Reports online cited partner price increases ranging from 110 percent to nearly 500 percent, and some quotes reportedly did not include volume discounts.
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Key insights
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Reseller discounts were reported to disappear under new quotes: Laughing Squid’s founder said previously negotiated reseller discounts based on mailbox volume and long customer history were not reflected in the new pricing quote.
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Rackspace tied the increase to maintaining service levels: A Rackspace spokesperson said the price increase effective March 2026 is intended to continue delivering the service levels customers expect.
Takeaways
Rackspace’s email hosting price increases prompted reseller partners to report large jumps in costs and to raise customer prices or offer alternative email providers.