Rackspace Email Price Rises Sharply | Switch to Save Costs
If you recently got an email regarding the Rackspace email price updates, you are not alone. Across IT domains, there is a lot of frustration and confusion.
Sorry to break your bubble, this is a brand new announcement. That clearly states that from March 1, 2026, Rackspace is jacking up its email hosting price by almost 300%. The pricing page is already updated to reflect the new prices.
This hike, especially with such short notice, has not gone well with the Rackspace community. With many users opting to migrate out before the price hikes hit. However, the question remains about where to move after quitting Rackspace. Moreover, there is still no consensus among the general IT audience on which is the safest and fastest route out of Rackspace.
Don’t worry, being in the IT field myself, I have assisted many users and businesses in changing their email service, and I will also help you out.
Before that, let us see why the prices are being changed all of a sudden.
Why is Rackspace Increasing Your Email Hosting Bill?
There is no single reason that clearly captures the Rackspace email price hike. Rather, it can be said that larger external market forces have compelled Rackspace to do so.
- Debt factor: I took a dive a bit deeper into Rackspace’s financials and checked out its latest 2025 Q3 results (courtesy Investing.com), where I saw that Rackspace is managing a significant amount of debt (around $2.7 billion, not surprising for a company of its size). So to pay down that debt, a price hike on existing products was one option that Rackspace took.
- The AI “Hardware” Tax: Rackspace relies on procuring new hardware to service more customers. However, with hardware costs (both RAM and SSD) ballooning due to AI-driven market demand, we are seeing cascading effects in various industries, like email hosting. So it’s not a surprise that companies like Rackspce are increasing prices to pass down the costs to consumers.
- Change in Focus: Rackspace was never able to compete with other giants in the field because of its small volume. So now I think they plan to consolidate their customer base (or whatever remains after the price hikes go live) for whom moving out of Rackspace would be costlier than paying the new premium prices.
If you think migrating from Rackspace to Gmail will be too costly, I suggest you see what the new prices look like, which might change your mind.
How Much More Will You Have to Pay for Rackspace
The difference is night and day. The hike is across the board and by a significant margin. The cheapest Rackspace plan is now more expensive than the premium plan.
Here is a direct comparison of current prices vs what users like yourself used to pay.
| Service Tier | What You Paid (2025) | What You Pay Now (2026) | The “Ouch” Factor |
| Basic Hosted Email | $2.99 /user/mo | $10.00 /user/mo | 334% Increase |
| Email Plus Add-on | +$1.00 /user/mo | +$2.00 /user/mo | 100% Increase |
| Archiving Add-on | +$3.00 /user/mo | +$6.00 /user/mo | 100% Increase |
| Reseller / Bulk Plans | ~$0.80 – $1.50 /user | ~$2.50 – $4.00+ /user | ~300% – 700% Increase |
Looking at the Rackspace price hikes, you might want to move away ASAP. However, before you take Rackspace to Google Workspace or elsewhere need to get a few things right.
What All You Need to Switch Away from Rackspace
Most important are the Rackspace server settings, which are as follows:
- Incoming Server: secure.emailsrvr.com
- Port: 993
- Security: SSL/TLS
- Username: Full email address
- Password: Account password
- Outgoing uses secure.emailsrvr.com on port 465 with SSL/TLS.
One tool helping many Rackspace users escape is SysTools IMAP to IMAP Migrator. It transfers everything cleanly via IMAP, no lost items, and supports Gmail, Yahoo, or any provider.
Looking at the two options
| Option | Cost | What You Get |
| Stay and pay | $10+ per mailbox | Same service, higher bill from March 1 |
| Move out now | $5 per address (min 5 = $25 total) | Full transfer, zero data loss, done fast |
The bulk move stands out for value. At $5 per address (minimum 5 at $25 total), it’s a fraction of the new rates and secures your emails elsewhere permanently.
Moreover, there is a free demo you can try out today. Check out my Rackspace to Office 365 migration guide
My Verdict On Rackspace Email Price Rise
Rackspace’s move echoes an industrywide trend of steady price hikes. For Rackspace specifically, there factors putting pressure on Rackspace, and they had to tweak their prices to keep their bottom line. Now, some may say that the increase is too much and borderline extortionate.
Frequently Asked Questions
Q: Will Rackspace’s email prices reduce in the future?
Not likely, email hosting is not an isolated industry. With hardware and energy costs showing no signs of slowing down, I am afraid the new prices will soon become the industry standard.
Q: Should I wait or migrate now?
I think migrating at the earliest is the best choice. However, a significant risk factor is that other players in the market may also jack up their prices, mimicking Rackspace. Which traps users as the new costs become the baseline, no matter which provider you go to.
Q: When does the Rackspace email price rise go live?
March 1, 2026, is the date you see the new revised invoices roll out. Moreover, as Rackspace never had any annual commitment plans, the price rise happens on day one for all users.
Q: How much more will I have to spend on Rackspace?
The most affordable option goes from $3 to $10 (a 233%+ increase), and other add-ons have also doubled in price. Resellers have to make even higher quotations to maintain their profitability.
Q: If I cancel Rackspace today, do I get a refund or discount?
No mentions in official info. Try to contact Rackspace support, but I must warn you, people have done this before with no luck.
Q: Best free alternatives to Rackspace?
Gmail and Outlook web are fine options if you have a small team. Otherwise its best to choose GSuite or M365.