German cloud provider Hetzner is raising its prices after seeing its own costs rise drastically.

First reported by Tom’s Hardware and the Register, Hetzner this week announced it was increasing the price of many of its products.

“There have been drastic price increases in various areas in the IT sector recently. That is why, unfortunately, we must also increase the prices of our products,” the company said. “The costs to operate our infrastructure and to buy new hardware have both increased dramatically.”

Price changes will impact services out of data centers in Germany, Finland, the US, and Singapore. The changes vary by product and location, but generally range from 30-50 percent per service. Some server instances are increasing by more than $100 per month at the most extreme end.

“We have genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible. But we can no longer compensate for the strain that it has placed on our operations,” Hetzner said in the announcement. “We want to continue to deliver quality products that meet both our standards and your expectations, so we must take this step.”

The price changes are due to take effect from April 1, and will impact both new orders and existing products.

This month also saw Hetzner increase its one-time setup fees for dedicated servers, citing “exceptionally high purchase prices for hardware components” that were disrupting cost models. The company said the increased fees would not cover the additional costs it has been incurring, but were a “necessary first step in order to continue using high-quality hardware, meet our quality standards, and remain able to deliver.”

The price of IT components, especially memory, has skyrocketed in recent months as the industry struggles to keep up with demand from the AI sector. RAM, NAND, DRAM, HDD, and SSD prices have all jumped, with the impacts even being felt in the consumer sector. CPU supply is also expected to be constrained, raising prices further.

Omdia's senior research director for enterprise infrastructure, Vlad Galabov, told the Reg that the price rise “reflects the brutal reality of the current hardware supply chain.”

Hetzner Online was established in 1997 as a privately owned web hosting company. It currently owns data center campuses in Germany (Falkenstein, Nuremberg) and Finland (Helsinki) and leases capacity in the US (Ashburn, Virginia, and Hillsboro, Oregon) and Singapore.

Octave Klaba, founder and CEO of European cloud provider OVH, last year said that the company might have to raise its prices 5-10 percent in 2026 due to an increase in the costs of RAM and NVMe components.

“At OVHcloud, we estimate that the same server produced in December 2025 and December 2026 will cost between +15 percent and +35 percent more,” he said. Posts to online forums suggest notifications of some price increases have already begun.