Hetzner raises prices by 50% starting April 1, citing cost pressures

Hetzner’s decision to lift prices by up to 50 percent reflects a perfect storm of component scarcity and rising operational costs that has been tightening the margins of Europe’s mid‑tier cloud providers. In a statement to customers, the German datacenter operator cited “drastic price increases in various areas in the IT sector” and “dramatically higher costs to operate our infrastructure and to buy new hardware” as the drivers of the hike (Theregister). The company’s price list shows many services climbing by more than 30 percent, with a few line items hitting the full 50 percent ceiling, a shift that will strain smaller developers and startups that have long relied on Hetzner’s low‑cost IaaS model.

The underlying hardware shortage is rooted in the surge of demand from the AI sector, which has forced chipmakers to prioritize high‑margin products such as Nvidia’s GPUs, high‑bandwidth memory (HBM), and fast NAND flash. The Register notes that DRAM and NAND prices are expected to double this quarter, while server CPUs are in short supply and hard‑drive manufacturers have already sold all units they plan to produce this year. This scarcity has pushed up component costs across the board, leaving providers that lack the deep‑pocketed buying power of the hyperscalers with little choice but to pass the expense onto customers. Omdia senior research director Vlad Galabov confirmed that “the 50 percent increase… reflects the brutal reality of the current hardware supply chain” and warned that “smaller and mid‑sized providers… have no choice but to pass these costs directly to their users” (Theregister).

Hetzner’s client roster— which includes the MariaDB Foundation, Bitdefender, and the Yocto Project—illustrates how the price shock could ripple through a diverse set of technology firms. For organizations that have built their infrastructure around Hetzner’s historically competitive rates, a 30‑plus‑percent rise in bandwidth, storage, or compute charges could force a reassessment of budgeting and, in some cases, a migration to alternative hosts. The Next Web has highlighted a growing interest in European cloud providers as an escape from the dominant U.S. hyperscalers, but the price hike underscores the fragility of that niche: without the scale to negotiate long‑term vendor contracts, providers like Hetzner must absorb market volatility or risk insolvency.

Industry analysts see Hetzner’s move as a bellwether for the broader “second‑tier” cloud market. Galabov predicts a cascade of similar adjustments, noting that “customers can expect to see more price rises coming from other providers.” In contrast, the hyperscalers—Amazon Web Services, Microsoft Azure, and Google Cloud—benefit from entrenched, multi‑year agreements that shield them from immediate component‑price spikes. This two‑tier dynamic could accelerate a segmentation of the cloud landscape, where budget‑conscious users are forced to choose between higher‑priced, stable services from the giants and volatile, potentially cheaper options from regional players now grappling with cost pressures.

The timing of the hike, announced on February 24 and slated for April 1, also coincides with broader macro‑economic pressures on the European tech sector. Rising energy costs, highlighted in a recent TechCrunch piece, are inflating data‑center operating expenses across the continent, adding another layer to Hetzner’s cost calculus. While the company asserts it has “genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible,” the confluence of hardware scarcity, energy price inflation, and limited bargaining power leaves little room for further mitigation (Theregister). For customers, the practical implication is clear: budget forecasts for cloud spend must be revised upward, and any migration strategies should factor in the likelihood of continued price volatility in the mid‑tier segment.