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CLOUD PROVIDER HIT IN RANSOMWARE ATTACK, EXPECTS LOSSES

Dec 6, 2022 | News

Cloud computing provider Rackspace said Tuesday morning a ransomware attack is
behind its ongoing Hosted Exchange outage that started early Friday morning.



“As you know, on Friday, December 2nd, 2022, we became aware of suspicious
activity and immediately took proactive measures to isolate the Hosted Exchange
environment to contain the incident,” the company said in an update to the
initial incident report. “We have since determined this suspicious activity was
the result of a ransomware incident.”

The investigation, led by a cyber defense firm and Rackspace’s own internal
security team, is in its early stages and is still investigating if any data
ended up purloined.

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The San Antonio, Texas-based cloud service provider said it will notify
customers if it finds evidence attackers gained access to their sensitive
information.

Rackspace said in its daily advisory:



Updated Advisory
“We appreciate your patience as we continue to work through the security issues
that have affected our Hosted Exchange environment. As you know, on Friday,
December 2nd, 2022, we became aware of suspicious activity and immediately took
proactive measures to isolate the Hosted Exchange environment to contain the
incident. We have since determined this suspicious activity was the result of a
ransomware incident.

“Alongside our internal security team, we have engaged a leading cyber defense
firm to investigate. Our investigation is still in its early stages, and it is
too early to say what, if any, data was affected. If we determine sensitive
information was affected, we will notify customers as appropriate.

“Based on the investigation to date, we believe that this incident was isolated
to our Hosted Exchange business. The Company’s other products and services are
fully operational, and we have not experienced any impact to our Rackspace Email
product line and platform. Out of an abundance of caution, we have put
additional security measures in place and will continue to actively monitor for
any suspicious activity.

“Rackspace is making available resources so that customers can migrate their
users and domains to Microsoft 365. At this time, we are unable to provide a
timeline for restoration of the Hosted Exchange environment. We are working to
provide customers with archives of inboxes where available, to eventually import
over to Microsoft 365.

“As a temporary solution while you set up Microsoft 365, it is possible to also
implement a forwarding option that will allow mail destined for a Hosted
Exchange user to be routed to an external email address. Please log in to your
customer account for a ticket with instructions to request this option.
Customers should reply to the ticket to request the forwarding rule be put into
place for each of their users.

Email Options
“If you do not see this ticket in your account and would like to take advantage
of this option, please open a support ticket with the title: REQUESTING
FORWARDING FOR HOSTED EXCHANGE. We will work with you to get this set up. NEW
mail that is sent after the forwarding rule is put in place will be forwarded to
the external address specified.

“Notably, the forwarding rule will not apply retroactively to mail sent before
the rule is put into place. This option can be used as a temporary solution
while you set up Microsoft 365. Once you have fully set up Microsoft 365 and
updated your DNS MX records, this forwarding rule will no longer be needed.

“We understand the frustration this situation has caused for our customers and
are doing everything we can to support them in migrating to Microsoft 365. We
have surged our support staff and will be taking additional steps to help guide
our customers through this process in order to limit the impact to their own
operations.

“We appreciate your continued patience and apologize for the inconvenience this
situation has had on our valued customers. We are doing everything we can to
make this right and will continue to provide updates and resources as
available,” the advisory said.

Other Services Operational
Rackspace said its other products and services are fully operational, and the
company has not experienced an impact to its email product line and platform.

The company also said it expects a loss of revenue because of the ransomware
attack.

“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,” the company
said in a release.

No further information was immediately available on who was behind the
ransomware attack and how much the attackers were asking for.


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