Rackspace reports ransomware in its Hosted Exchange email business

Rackspace Technology, the managed cloud services company, disclosed on December 6, 2022 that a ransomware incident had hit its Hosted Exchange environment, disrupting email service for customers of that product. It furnished the disclosure under Item 7.01.

First filing

Rackspace said it had isolated the environment and believed the incident was confined to Hosted Exchange. It sized the business at risk. The company had been posting service announcements on its website since December 2.

December 9 update

Three days later Rackspace said its outside investigator had confirmed containment and put the affected business at about 1% of total annual revenue, made up mostly of small and medium businesses. Customers were being moved to Microsoft Office 365, and the company said it expected to be able to absorb the costs.

Open at the time

Data recovery for affected customers was still in progress, and the filings do not say whether customer email data was taken.