Today, Texas-based Rackspace, a supplier of cloud computing services, disclosed that a Hosted Exchange outage that has been called a “isolated incident” is actually the result of a ransomware attack.

In an addendum to the initial incident report, the business stated, “As you know, on Friday, December 2nd, 2022, we became aware of suspicious activity and promptly took aggressive measures to isolate the Hosted Exchange environment to contain the situation.”

Since then, “We’ve found that this unusual activity was caused by a ransomware outbreak.”

The investigation, which is being conducted by a cyber defence company and Rackspace’s internal security team, is still in its early stages, according to Rackspace, and it is unclear “what, if any, data was compromised.”

If the cloud service provider discovers proof that the attackers had access to their sensitive data, it promises to alert the clients.

In a press release, the company noted, “Based on the investigation to far, Rackspace Technology believes that this problem was isolated to its Hosted Exchange business.”

Other services and products offered by Rackspace Technology are fully functional, and the company’s Email product line and platform have not been impacted.

In today’s press release and an 8-K SEC filing, the company also stated that it anticipates a loss of income as a result of the ransomware attack’s effects on its $30 million Hosted Exchange business.

Despite the fact that Rackspace Technology is still investigating the incident, the company stated that it “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 in revenue annually in the Apps & Cross Platform segment.”

Additionally, Rackspace Technology may incur additional expenses as a result of its reaction to the event.

All services in Rackspace’s Hosted Exchange environment, including MAPI/RPC, POP, IMAP, SMTP, and ActiveSync, as well as the Outlook Web Access (OWA) user interface that allows access to online email management, are still affected by the outage.

The corporation first reported the outage on its status page on Friday night at 02:49 AM EST, which is four days after today’s notification.

Twenty-four hours later, Rackspace disclosed the real cause of the outage, citing a security incident that was “contained to a piece of our Hosted Exchange platform” and required them to shut down and disconnect the Hosted Exchange environment.

Due to the incomplete information, some of the customer’s suspicions that the downtime might be the result of malware or ransomware attacks were validated today by the company.

Until the outage is fixed, Rackspace has been offering impacted customers free Microsoft Exchange Plan 1 licences and comprehensive instructions on how to migrate their email to Microsoft 365 (details on activating the free licences and moving users’ mailboxes to Microsoft 365 are available in Rackspace’s incident report). This service has been available starting on Friday evening.

Additionally, the business offers customers a stopgap remedy while they transition to Microsoft 365: a forwarding choice that will automatically divert every email sent to a Hosted Exchange user to an outside email account.

“We are unable to give a timeframe for the restoration of the Hosted Exchange environment at this time. Where possible, we are aiming to offer customers inbox archives to eventually import into Microsoft 365 “The update from today includes Rackspace.