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Rackspace said that, as it continues working to bring its remaining customers back online, it wants to reiterate some additional information around the measures it has taken to secure the Hosted Exchange email environment, as well as the status of its investigation into the recent cybersecurity incident. "As soon as we detected suspicious activity, we followed our incident response plans, acting immediately to contain the threat," the company said via Twitter. "There have been no signs of attacker activity in the environment since December 2 and no evidence that the attackers were able to move laterally. We can confirm this was a financially motivated threat actor. We're working with CrowdStrike, other cybersecurity experts, and federal authorities to finalize the investigation as expeditiously as possible, at which then we can share more information with you all. We appreciate your patience as we conclude these important investigations." Reference Link

Rackspace Technology issued an update following the recent ransomware incident affecting its Hosted Exchange email business, a managed email solution provided to small and medium businesses. Following the discovery of the incident, Rackspace engaged industry-leading global cybersecurity firm CrowdStrike to help investigate and remediate. Due to swift action on the Company's part in disconnecting its network and following its incident response plans, CrowdStrike has confirmed the incident was quickly contained and limited solely to the Hosted Exchange Email business. "Our Information Security team had strong incident response protocols in place that led to the quick containment of the ransomware attack. We invest time and resources in cybersecurity - we take our processes and procedures very seriously around cyber threats. This is why other parts of our business, and the vast majority of our customers were not affected in any way by the incident and remain secure and fully operational," said Josh Prewitt, Rackspace Chief Product Officer. Rackspace continues to make significant progress in its investigation into the incident. The Company's investigation is also focused on understanding root cause and implementing additional security measures to defend against future cyber threats. Rackspace will share additional updates on these measures with customers as appropriate. "We are a customer-first organization and sincerely apologize for the disruption this incident has caused those customers who utilize our Hosted Exchange email services," Prewitt continued. "We have prioritized getting our customers back on email and have surged our staff and been working around the clock to support them in this transition. We have made significant progress getting customers back on email and will continue to focus our efforts to support customers and get them on email as soon as possible. We are continuing to work on data recovery, which we know is very important to our customers. Rackspace understands the importance of addressing this incident and we've prioritized communication with customers, exploring every potential avenue to reach them, share the information that is known, and most importantly, get them access to email."

Rackspace Technology announced a ransomware incident affecting its Hosted Exchange environment, which is causing service disruptions for the company's Hosted Exchange customers. Alongside the Rackspace Technology internal security team, the company has engaged a leading cyber defense firm to investigate. Immediately upon detecting the incident, the company took proactive measures to isolate the Hosted Exchange environment to contain the incident. Based on the investigation to date, Rackspace Technology believes that this incident was isolated to its Hosted Exchange business. Rackspace Technology's other products and services are fully operational, and the company has not experienced an impact to its Email product line and platform. Out of an abundance of caution, Rackspace Technology has put additional security measures in place and will continue to actively monitor for any suspicious activity. Rackspace Technology is in ongoing communication with Hosted Exchange customers to help them migrate to a new environment as quickly as possible. Rackspace Technology has surged support staff and will be taking additional steps to help guide customers through this process in order to limit the impact to their own operations. Although Rackspace Technology is in the early stages of assessing this incident, the incident has caused and may continue to cause an interruption in its Hosted Exchange business and may result in a loss of revenue for the Hosted Exchange business, which generates approximately $30 million of annual revenue in the Apps & Cross Platform segment. In addition, Rackspace Technology may have incremental costs associated with its response to the incident. Rackspace Technology continues to investigate the incident. Beginning on December 2, 2022, the company issued service announcements on its website with details relating to the foregoing incident and will continue to post updates on its website as warranted.