The price of energy has gone through the roof in the European Union. The Ukraine-Russia conflict is the main culprit here. As there is an extreme lack of gas supply in the European Union, prices increased due to an imbalance between supply and demand for energy.
This increase in the inflation rate, in consequence, raises the cost of materials and labour. To keep profit margins high, businesses shift costs onto their customers.
In March 2022, hits of what was to come came to light when the UK arm of Sungard, a glocal datacenter provider was forced into administration. Their energy prices had gone up, and failing to pass them on to customers left them no choice.
Which Hosting Companies have Raised Their Prices
The reality of cloud inflation is that the IT sector will need to adapt to the new economics of cloud computing.
To better understand these factors influencing pricing increases, let's look at a few examples of cloud hosting companies that raise their prices.
Hetzner informed customers in August that they would increase their prices in September. In this case, the reason was increasing energy pricing was very clear. Saying as wholesale prices are unlikely to come down, they have been forced increases pricing by 10%
The increase in the rates for the new products was applied from 1 September. However, if any customer bought a product before 1st September, it will cost the previous price till the end of this year, and from 1st January 2023, new pricings will indulge.
Scaleway emailed their customers in October, saying from December expect an increase in pricing of about 10% and again due to the souring gas prices, Citing that they have seen an 85% increase in their electricity costs.
DataPacket, a company we use for all our serverless-based backups, emailed in October, informing customers they were going to see significate price increases in their EU data centers' energy costs. It was a warning shot as they don't know the new prices.
However, it was nice to see they were going to increase prices based on DataCenter locations, so customers did have the option to explore relocating. Unfortunately for us, they did day significate increase for Amsterdam and frankfurt.
In October, Crontabo emailed customers saying they would be increasing prices by roughly 9.1% on average for all new and existing customers. Again citing increased energy costs.
In September, OVH announced they would increase prices by ~10%, citing the energy crisis. The new pricing is coming into effect from November for public cloud servers and December for bare metal.
The agreement with the cloud service ends in December 2022. The next contract will cost more, according to OVH. Starting on December 1, 2022, users of bare metal servers, hosted private clouds, public clouds, and web hosting services should anticipate price rises.
This is a dynamic story, and we might have missed an update/hosting company announcement, so please feel free to email us, and we can update this.