[shakalandy]

Hetzner Founder and CEO Martin Hetzner shared a response to the critics in the Hetzner Forum (user benji) over here: https://forum.hetzner.com/index.php?thread/32635-standardisi...

Translated from German via Claude:

"For better understanding, I would like to provide some additional notes: Hetzner Online's pricing strategy has remained unchanged for many years. Our prices are based on the respective purchasing conditions as well as internal operating costs. The key pricing factors — for example, depreciation periods and profit margins — have remained constant over many years and will continue to do so. The past nine months were an exception. During this period, we have increasingly subsidized new server hardware and passed on the increased purchasing costs to our customers only with significant delay. We are currently observing a similar development at numerous other data center operators as well. The increased purchasing prices will likely lead to a new market level. However, our established price-performance ratio will change as a result only temporarily — if at all — until the market has adjusted to the new conditions. Hetzner Online has always stood for an outstanding price-performance ratio, and that will not change in the future either. I am convinced that the current hardware crisis will neither sustainably improve nor worsen our competitive position. Rather, I expect that our relative position in the market will hardly change even within the new pricing structure. In the short term, shifts may indeed occur, since the individual market participants make their price adjustments at different points in time. In the medium and long term, however, I do not expect any significant changes to the competitive landscape."

[lschueller]

Thank you for sharing this statement. In other words, we now experience the secondary costs of the AI boom (and supply chain pressure). It won't get cheaper. I fully understand the decision of Hetzner. And even though I like low prices, the prices are still fair imo.

[bflesch]

I'm happy they increase prices if it helps them to stay sustainable and independent. Companies spend millions on US cloud providers and AI subscriptions, but suddenly one of the best hosting options in Europe is not worth 30% more. Especially with regards to the overall cost increases.

Several random anti-Hetzner hate threads have popped up on social media and to me it shows that Hetzner is doing something right.

Nobody wants Hetzner to be bought by Oracle or Amazon.

[awongh]

afaik prices for the big cloud providers haven't changed this much. Their instance prices are already inflated and they're probably willing to eat into their own margins to keep prices stable and just wait out the capex increase (also probably a drop in the bucket next to the hyperscale rollout).

People love to say how great it is for these alt clouds to have lower prices, until they're exposed to market forces with a company unable or unwilling to eat their profit margins.

[Aissen]

People love to say how great these big clouds are, until they discover they've been paying ten times the market price outside of crises.

[dividedbyzero]

They can be pretty great, but not for just servers. Hetzner and others serve that market segment much better.

[throwaway85825]

The world's most expensive insurance and without any legal protection.

[delusional]

There is not a snowballs chance in hell that MS or Amazon isn't charging you at your absolute pain tolerance. As that tolerance goes up because the baseline of the market raises prices, the "hyperscalers" will too, but tenfold.

There is no price stability to be found with MS.

[awongh]

It’s all about perspective, because Vercel is probably another 3-10x markup on AWS?

These kinds of choices are kind of pricing range as engineering decisions in the end.

[bflesch]

I think you're making a false comparison. Big cloud providers have many more hidden config settings they can tune to save costs, they are not offering dedicated server with specific hardware. Hetzner's dedicated servers have a specific hardware configuration that you are contractually obligated to.

[matt-p]

It's interesting because there are still smaller providers who are offering slightly better prices than hetzner and large hyperscalers are keeping costs static.

Hardware costs are insane, no doubting it but it's more important than ever to be looking at the servers you're buying. For example a stick of 32GB DDR5 6400 ECC is about 1050 vs 16GB DDR5 6400 ECC is only 280 (pounds in this case), so if you can cope with say 192GB of ram in a 12 slot server, it's almost cheaper to buy two 192GB RAM servers than one 384GB one.

[UnlockedSecrets]

Hah..... we recently had to buy a couple hundred 16GB DDR5 RDIMM for a few new servers and i wish it was only 280 pounds.... Double it and you are close....