RACKSPACE TECHNOLOGY, INC. Item 7.01. Regulation FD Disclosure.
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The Hosted Exchange Email business represents approximately 1% of Rackspace's total annual revenue and is comprised of primarily small and medium businesses who solely use this product. No other Rackspace products, platforms, solutions, or businesses were affected or are experiencing downtime due to this incident.
Rackspace is actively transitioning the affected customers to the more modern Microsoft Office 365 - with many having already successfully completed the migration. Rackspace is working diligently and expeditiously with the goal of getting all customers back up and running. The Company is making all of its resources available to provide support to those remaining customers, including additional surge staff and a Microsoft Fast Track team who has deployed to supplement the Rackspace workforce.
"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
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 maintains cybersecurity insurance commensurate with the size of its business, and is confident in its ability to absorb potential financial costs associated with the incident and fulfill its obligations to other customers.
The information in this Current Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward-Looking Statements
This Current Report on Form 8-K includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to our expectations regarding our ability to contain and assess the ransomware attack and the impact of the ransomware
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attack on our clients and financial results. These statements are neither
promises nor guarantees, but are subject to a variety of risks and
uncertainties, many of which are beyond our control, which could cause actual
results to differ materially from those contemplated in these forward-looking
statements. Existing and prospective investors are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. Factors that could cause actual results to differ materially from those
expressed or implied include the ongoing assessment of the ransomware attack,
legal, reputational and financial risks resulting from cyberattacks, including
the ransomware attack, the effectiveness of business continuity plans during the
ransomware attack, and the other factors discussed in our most recent Annual
Report on Form 10-K and other filings with the
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