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Rackspace’s massive email outage caused by ransomware

The news: Hosting provider Rackspace said a ransomware attack was responsible for its dayslong outage that began on December 2, meaning the emails of tens of thousands of users could be lost, per The Register.

A big target for ransomware criminals: Ransomware attacks happen through phishing emails or websites containing malware that can gain access to a user’s PC and spread throughout a network.

  • Most ransomware attacks infect individuals or companies and hold their data hostage. In the case of Rackspace, a ransomware attack could have taken email and other customer information worth billions of dollars.
  • Rackspace stated that the intrusion was isolated to its hosted Exchange businesses.
  • The company also said in an SEC filing Tuesday that the attack "may result in a loss of revenue" for its $30 million Exchange business, as well as other "incremental costs."
  • Rackspace customers, made up of thousands of companies and tens of thousands of users, were told to “self-migrate” to a competing mail hosting service.
  • Customers haven’t heard back on data loss, restore time, or access to email archives.

Rising tide of cyber threats: One in 40 organizations is targeted by a ransomware attack weekly, with government, military, education, research, and healthcare industries the most targeted, per CheckPoint Research (CPR), a 32% YoY increase.

More than 25% of organizations expect double-digit growth in cybersecurity budgets in 2022, per PwC’s 2022 Global Digital Trust Insights report.

The bigger picture: The ransomware attack could be devastating for Rackspace and a wake-up call for any business relying on third-party hosting services to securely manage their data.