Hetzner Dedicated Server Price Increases

Hetzner Increases Bare Metal Pricing by 3-4x

Hetzner has implemented a substantial price increase for its dedicated server offerings, with some models seeing costs rise by 300% to 400%. This follows a previous price hike of approximately 30% just a few months prior.

Specific examples of the price jumps include:

  • AX102: Increased from €124 to €454
  • AX162 (256GB): Increased from €244 to €844 (some users report the previous price as €274)

Market Drivers: Hardware Scarcity and the AI Boom

The primary driver for these increases appears to be the soaring cost of hardware components, specifically RAM and disk storage. Industry observers suggest the current AI boom has created a bottleneck in component production, leading to scarcity and skyrocketing prices.

Some users attribute this trend to the limited number of DRAM manufacturers—namely SK Hynix, Samsung, and Micron—which may make it easier for hyperscalers (like AWS, GCP, and Azure) to dominate the supply chain, potentially making it impractical for smaller providers to maintain low costs.

Impact on Infrastructure and Service Providers

Effects on Micro-VM Providers

Services that sell micro-VMs by running them on top of Hetzner bare metal machines are facing a significant increase in input costs. Because the price jump occurred with minimal detailed notice—users report a general announcement of pricing changes two weeks prior without specific figures—these providers may struggle to maintain their margins.

Availability and Capacity Issues

High demand has led to capacity shortages. Users have reported that some VPS plans are currently unavailable for upgrade due to brutal demand, suggesting that the price increase may be a response to an inability to meet existing demand levels.

User Perspectives and Alternatives

Customer Sentiment

Community reactions range from shock to resignation. Some users argue that Hetzner's value proposition was based almost entirely on affordability, noting that without low prices, the provider's subpar latency and protection become more apparent.

"No one has real reason to choose hetzner if it is not affordable. OVH ends it, one Romanian provider as well."

Mitigation Strategies

For those seeking to avoid the new pricing, users have suggested the following:

  • Server Auctions: Users can still find cheaper, older CPUs and high-RAM configurations through Hetzner's auction system.
  • Existing Contracts: Some evidence suggests the new pricing applies primarily to new orders, meaning long-term customers on older machines (e.g., AX41-NVMe) may not see immediate increases.
  • Alternative Providers: Users have mentioned moving to other providers such as UpCloud, OVH, or Romanian providers as alternatives for EU-based operations.

Broader Industry Trends

This trend is not isolated to Hetzner. Other budget providers, such as Contabo, have reportedly increased prices by 30-35% within the same month, indicating a broader upward trend in infrastructure costs that may increase the barrier to entry for non-VC funded startups and individual developers.

Sources