Rackspace, a leading provider of cloud computing services, has left its reseller partners reeling with a staggering 706 percent price hike for its email hosting services. The drastic increase, which applies to the company's standard plan, will now cost $10 per mailbox per month, up from just $3 per mailbox per month.
Scott Beale, founder of Laughing Squid and a Rackspace reseller since 1999, described the new pricing as "devastating" in an email to Ars Technica. The news was made public just a few weeks ago, when Rackspace updated its pricing for its email hosting services. The company's standard plan is now accompanied by additional costs for the Email Plus and Archiving add-ons.
While Beale acknowledged that some reseller partners may be able to absorb the increased cost without issue, he noted that his own business would suffer significantly due to the substantial price hike. "The price increase has a major impact on the ability to make money," he said, citing the fact that email is now his largest expense.
Beale's sentiments are echoed by other reports of Rackspace partners facing significant price increases, ranging from 110 percent to nearly 500 percent. The new pricing structure does not include volume pricing discounts, which further exacerbates the issue for larger businesses with numerous mailboxes.
Industry experts point out that the prohibitive pricing is making it increasingly difficult for reseller partners like Beale to compete. As email hosting becomes more complex and resource-intensive, companies are shifting their focus towards offering managed services on top of cloud solutions like Microsoft 365 or Google Workspace. This trend, combined with an AI-driven RAM shortage impacting computing component availability and affordability, may be driving Rackspace's decision to minimize its email hosting duties.
In response to Ars Technica's inquiry about the price hike, a Rackspace spokesperson stated that the company is committed to delivering quality and reliable hosted email solutions for businesses. However, the dramatic increase in pricing has left many reseller partners scrambling to adjust their offerings at lower prices.
Scott Beale, founder of Laughing Squid and a Rackspace reseller since 1999, described the new pricing as "devastating" in an email to Ars Technica. The news was made public just a few weeks ago, when Rackspace updated its pricing for its email hosting services. The company's standard plan is now accompanied by additional costs for the Email Plus and Archiving add-ons.
While Beale acknowledged that some reseller partners may be able to absorb the increased cost without issue, he noted that his own business would suffer significantly due to the substantial price hike. "The price increase has a major impact on the ability to make money," he said, citing the fact that email is now his largest expense.
Beale's sentiments are echoed by other reports of Rackspace partners facing significant price increases, ranging from 110 percent to nearly 500 percent. The new pricing structure does not include volume pricing discounts, which further exacerbates the issue for larger businesses with numerous mailboxes.
Industry experts point out that the prohibitive pricing is making it increasingly difficult for reseller partners like Beale to compete. As email hosting becomes more complex and resource-intensive, companies are shifting their focus towards offering managed services on top of cloud solutions like Microsoft 365 or Google Workspace. This trend, combined with an AI-driven RAM shortage impacting computing component availability and affordability, may be driving Rackspace's decision to minimize its email hosting duties.
In response to Ars Technica's inquiry about the price hike, a Rackspace spokesperson stated that the company is committed to delivering quality and reliable hosted email solutions for businesses. However, the dramatic increase in pricing has left many reseller partners scrambling to adjust their offerings at lower prices.
706 percent is like, whoa! I mean I get it, companies gotta make money but this is just ridiculous 
. I've got a small online store and I rely on email hosting services from Rackspace to run it. Now they're gonna charge me almost triple what I'm paying now? 
. But now it's like Rackspace is taking advantage of these small-time email hosting resellers? A 706 percent price hike?! That's just crazy talk! 
It's like they're trying to stifle innovation and competition. I mean, I get it, business is business, but come on! 
. And what's up with this "quality and reliable" stuff? Sounds like a load of BS 
to me. These resellers aren't just dealing with email hosting, they're also trying to keep their businesses afloat 
. Rackspace should be thinking about how they can help, not just take more cash out of the mix 
. I get it, Rackspace needs to make a profit 
! My buddy who runs a small online store has his entire email hosting on Rackspace and now he's gonna lose so much money 
. I mean, can't they see how this affects the people who rely on them for a living? It's just a numbers game now 
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. Maybe someone will step in and help these small business owners out 
.
i mean i get it, cost of doing biz changes and all that but cmon rackspac u gotta think bout ur reseller partners they r countin on u 2 make money n u jus slapem wit a price hike like dat? 
industry experts say its makin it hard 4 them 2 compete w/ managed services like microsoft365 or googleworkspace 
dont get me wrong i think rackspac still gotta deliver quality email hosting solutions but come on be realistic about pricing u cant jus increase price by 706% n expect resellers 2 b all good 
. The fact that industry experts are saying it's making it hard for them to compete is just music to my ears... like, good luck with that, guys 
. I mean, Scott Beale has been with Rackspace since 1999, and he's not the only one who's feeling the pinch 
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. And on top of all this, there's an AI-driven RAM shortage affecting computing component availability and affordability... it's like the universe is conspiring against us 
. After all, someone's gotta speak up for these poor guys who are getting burned by this price hike 
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... until then, it's gonna be tough for those reseller partners.
. It's no wonder they're shifting focus to managed services - it makes way more sense financially 
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