Rackspace’s formerly reported “security incident” (opens in new tab) has now been confirmed to be a ransomware breach that affected its Hosted Exchange solution.
As a precaution, Rackspace isolated its Hosted Exchange offering in a bid to contain the incident, and is in communication with customers to help them migrate to a new environment.
The issue was detected on December 2, 2022, to which Rackspace says its internal security team is receiving help from a cyber defense company to investigate.
Partially resolved security breach
Based on the investigation to date, Rackspace says that this incident was isolated to its Hosted Exchange business, and all its other products and services are fully operational. The company added that it has not experienced an impact to its email services (opens in new tab) and platform.
“Rackspace’s latest outage shows us that bigger doesn’t always equal better when it comes to cloud services. Many users however still subscribe to this myth, with name recognition and scale helping to portray Big Tech cloud providers as infallible,” said Mark Boost, CEO of Civo.
“Yet the latest large-scale cloud outage again disproves this opinion. Hyperscalers have a huge number of endpoints that can lead to a security vulnerability. On top of this, their sheer size means there is a vast amount of moving parts, adding unnecessary degrees of complexity that increases the risk of a breach or outage.”
In a blog post (opens in new tab), Rackspace mentions that it has put additional security measures in place and will continue to actively monitor for any suspicious activity, following the ransomware incident.
Rackspace hasn’t ruled out the possibility that this incident may continue causing interruptions to its Hosted Exchange solution, and may result in a loss of revenue for the Hosted Exchange business.
Currently, its Hosted Exchange environment generates $30 million of annual revenue in the Apps and Cross Platform segment.
The Hosted Exchange environment includes 100 GB mailboxes, real-time outlook, OWA & mobile synchronization, as well as anti-spam and anti-virus features.