February 4, 2023

An outage that has affected Hosted Exchange customers of Rackspace Technologies has been confirmed to be the result of a ransomware attack.

Rackspace said that the ransomware attack was isolated to its Hosted Exchange business and that its other products and services are fully operational, including its email product line and platform. Along with internal security team, a cyber defense firm has been hired to investigate the attack.

Proactive measures have been put in place to contain the incident and other defense in place for monitoring suspicious activity.

The incident, which has been ongoing since Dec. 2, may result in a loss of revenue for the Hosted Exchange business, which generates about $30 million in annual revenue in Rackspace’s Apps & Cross Platform segment. Additional incremental costs may also be associated with the response to the incident.

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As per the report from Bleeping Computer, the outage still affects all services in the Hosted Exchange environment, including MAPI/RPC, POP, IMAP, SMTP and ActiveSync, as well as the Outlook Web Access interface that provides access to online email management.

Affected customers are being provided with Microsoft Exchange Plan 1 licenses and instructions on migrating their email to Microsoft 365 until the outage is addressed.

Rackspace said it has been unable to ascertain whether any consumer data was affected by the attack but added that it would notify customers if it finds that data has been stolen.

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