> Until this change, customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources. We want to make things more balanced.
I may know one of the culprits -- whom I will leave unnamed here. But the company, who is fairly popular, built out their own CDN via putting a bunch of nginx caching proxies on various Hetzner servers around the world. It apparently was really cheap and very effective. Given that they were bootstrapped and this was prior to Cloudflare really being that popular, it was a great strategy. This was true like 8 years ago, so maybe it has changed in the meantime.
Sounds like a completely legitimate use though. Hetzner were widely telling people about that 20TB limit, so why would they be surprised when people use them as CDN boxes?
Where's the surprise? It's the classic business 2-step - drum up interest with "too good to be true" features, then cut them back. The marginal customers who need those features leave (and are too expensive to keep), everyone else is used to your product and stays.
Until you remember that marketing is a separate department from finance which is a separate department from ops/engineering.
The engineers said 20TB in aggregate was fine but likely didn’t consider the “bad apples”. Marketing obviously wants to use the biggest numbers and then finance comes in with the hammer and dev points to egress as an simple way to upset rhe fewest number of real customers.
I think culprits is a poor choice of words since it means someone suspected of a misdeed. I could perhaps understand using it for example for someone that tried to store a petrabyte of storage on a consumer unlimited storage plan. But in this case Hetzner set a specific data usage amount you are paying for so using that amount is not a misdeed.
It also may depend on peering arrangements Hetzner has. If EU ISP more inclined to peer with Hetzner than US one bandwidth in EU will be cheaper for them.
- in EU there are large peering exchanges to swap traffic
- in USA no peering exchanges exists and you need to pay for your traffic most of the time. Few big operators in US and they enforce this.
Looks like some deal wasn't renewed and they lost a big chunk of cheap pipe or/and some of their upstream providers decided to do something with routing.
probably streaming platforms have better content on the US and everyone wants to exit there? so they are mostly serving US traffic for several vpns all over the world connecting to CDNs in the US.
Isn't Hetzner impacted in Europe at the moment from a cable cut? Wouldn't surprise me if there is a wave of people moving stuff over to the US because of that. I don't know much about cloud though. I believe "The Ship has arrived and repairs are underway, which will still take some time." and "the repair may take up to two weeks.".
“Culprits” because they used the service they paid for within its advertised limits?
It’s the same with cloud storage providers. First give out a massive amount of storage and rapidly gain users, then cut it down after blaming people for “abusing” it. How about you advertise your correct capacity to begin with?
They are simply deflecting blame for their own enshittification.
Having said that, I am usually empathetic to these kinds of 'unlimited' deals because even though they aren't really 'unlimited', they do tend to be generous to the average use-case and average user .. Inevitably, and unfortunately, someone decides to test the limits and the entire thing collapses.
It reminds me of the Blockbuster "No more late fees" policy, which was a really good customer-friendly policy (speaking as someone who regularly returned rentals late) .. but then they were sued because an aspect of the policy had Blockbuster charging the cost of the rental to the customer if it wasn't returned in some period of time .. and because that charge looked like a 'late fee' they got sued. Urgh.
It’s not any more possible to correctly anticipate all pricing structure vulnerabilities, than it is to correctly anticipate all program and API security vulnerabilities. There is always a statistical chance of novel outcomes when humans are involved.
I was curious and checked if they are still using Hetzner. It appears not, so I can share who it was. It was https://artstation.com. Basically heavily oriented towards serving static images, so the CDN could have been really expensive. Doing a reverse IP lookup on cdn.artstation.com servers now resolves to Cloudflare and it has cloudflare headers on the response.
This is typical of Hetzner, if a product SKU is losing money they very quickly make changes, even going as far as to discontinue the product entirely (eg. GPU servers). They definitely don't seem to be a fan of loss leaders.
I'm guessing somehow the traffic usage patterns of their USA customers was very different to their EU counterparts, or the cost of expanding network capacity was a lot higher than anticipated.
It's a bit of a shock for sure but it seems this model is a big part of how they can maintain their slim margins.
I have no complaints at all about this model. They work out the cost of providing a service, then they charge that cost plus a markup. They keep doing things that make them money. They stop doing things that don't make them money.
It seems like a straightforward way to run a business.
To be fair, given how cheap a lot of Hetzners products (especially Server Auction, my beloved) are compared to the competition, not wanting to have loss leaders seems reasonable to me
It's $120/TB for the first 10TB in a month, so you need to be spending >$1200 just on bandwidth every month before you even get the "discounted" rates.
In Singapore and Asia in general traffic is very expensive, because there are no peering exchanges. So you need to pay for each Mbps you use. Big ISPs there are oligopolies and aren't too fast or keen to work with you.
They're only raising the prices of customers whose servers use more than a terabyte per month. Based on my experience, it's not easy to go over a terabyte of bandwidth for most web services. I doubt the majority of their customers will see any change in price.
Sucks to pay a dollar per terabyte extra if you're downloading a petabyte per month through your hetzner VPN, but this sure beats raising everyone's prices because two or three companies decided to use Hetzner to build a CDN.
This is why you can't offer unlimited anything, and why we can't have nice things.
> They're only raising the prices of customers whose servers use more than a terabyte per month.
It sure reads to me like they raised the base instance price across the board. The biggest increases will be for those using over the new included bandwidth (min 1tb) but they are going up for everyone.
Yeah, I really don't understand that part of the message. It'd make sense if they were lowering prices elsewhere, but now they just... raise them? I seriously don't see how that benefits _anyone_ except Hetzner.
What likely happened here is that they were raising prices due to increased costs for energy and various other costs, and if they hadn't made this change then they would have had to increase the price more, so relative to that it keeps it cheaper for low-traffic customers - and they just communicated this poorly.
Yeah, the justification given makes absolutely no sense - you are paying more than before even if you stay under the new limit (which is 1/20th of the original!)
They also use the word "tariff" several times without elaborating, as if the person who wrote the email doesn't know the actual meaning of the word.
Seems like intentional deception to hide a standard "we just want more money" price raise.
> as if the person who wrote the email doesn't know the actual meaning of the word.
In my country, "tariff" is seen in several contexts:
* A tax on imports, much in the news since the recent US election.
* A pub or bar's price list is known as the "bar tariff"
* Energy companies offer a selection of "tariffs" i.e. agreed contract rates for usage-based pricing. e.g. a 3-year-fixed-price tariff, a 100%-green-energy tariff, and so on.
* The portion of a 'life' jail sentence which must be served, before a prisoner can be considered for parole.
So I don't think it's incorrect to call a price list a "tariff", merely unusual.
> So I don't think it's incorrect to call a price list a "tariff"
I'm pretty sure it is in American English. That usage might be ok in British English, but for Americans that terminology is going to be confusing. Before today, I had never heard tariff used for anything other than import taxes. And since this applies to servers in the US, it would make sense not to use terminology that would be confusing to people in that country.
as if the person who wrote the email doesn't know the actual meaning of the word.
The word "tariff" has a few different meanings. I'd say they're using it correctly, just not with the same meaning that the word is commonly being used in the news right now.
It's not used that way in American English at all; it almost borders on archaic. Given the purpose of this email was to primarily let their American customers know they'd be raising prices on them, it seems unfair to tell someone they're ignorant when they were sent a message containing verbiage that has entirely different meaning to them.
"We just want more money" Is the standard operating procedure and the goal of all for-profit companies. How can hackers not understand this? Of course they will always want as much money as possible, and it is up to you as a customer to decide if their product is worth what they are asking or if you will go to a competitor.
Because hackers are individual human beings, and as such are motivated by a whole variety of reasons, money being just one of them.
When running small companies they still tend to be motivated by other things, such as proving a point, achieving a technical goal or having some cultural influence etc.
It's only when the company grows in size that it becomes this soulless greedy sociopath we are all too accustomed to.
> It's only when the company grows in size that it becomes this soulless greedy sociopath we are all too accustomed to.
Most small and medium size businesses also fit this description. And I don't consider a price hike to be sociopathic or soulless. Greedy, sure. But businesses are always profit focused first and foremost.
This thread is where I'm learning that American English uses tariff mainly for import tariffs. Here in India, the most common usage of it is to talk about telecom tariffs - mainly mobile, sometimes broadband. So it didn't even occur to me when reading the question that it might have anything to do with import tariffs, until I read some comments that misunderstood it that way.
Not just mainly, but exclusively in my experience. (Import/export tariffs.)
Until this thread, I have never encountered the term "bar tariff" for a list of drink prices, or "energy tariff" instead of rate. Those uses are simply not American English, and you would be misunderstood.
Hetzner is a German company so I find myself wondering if this is a British usage, or a mistranslation of the German word "tarif" that should be "rate"? (A common mistranslation category known as "false friends".)
One of the most frustrating things about Duolingo is that they refuse to have an International English setting for the language you are learning from. I’m trying to learn french but WTF is a ‘stroller’ or an ‘eggplant’ or even more frustrating are the ones where the word is almost the same in the UK as in France e.g ‘athlétique’ in French is ‘athletics’ in UK English but ‘track’ in US English.
Good to know, so it's an American vs. British thing. Thanks!
Is there any further distinction between a "tariff" and a "rate" in British English? The example sentence you provide uses both, which makes me wonder if there's even more to the picture here.
Without checking, my feeling is a "tariff" is the whole contracted agreement, and a "rate" is a part of it.
An EV electricity tariff might have a cheap night rate, and a more expensive day rate. Another tariff might be entirely variable rate (price changes every hour).
Wiktionary defines a tariff as "A schedule of rates, fees or prices." so I think my feeling is correct.
Unclear to me why you're being downvoted. I previously knew non-US people refer to rates as "tariffs", but I never heard it in a US context. It's not rare, it's just not a meaning of the word Americans typically know.
I vaguely remember the word tariff being used to refer to fees or duties in a history class growing up, but as you've noted, it's not used this way in American English anymore. When I got the email from Hetzner this morning, I thought they were taking preemptive action against some tariff/sanction that Trump must have announced against EU data companies.
Hetzner have definitely always been scumbags about the bait & switch on aspects of their service like that. Granted it's pretty typical of the too good to be true rule of life.
> for other customers who have used much more resources
So, "Pi mal Daumen"* this means that US customers have a bandwidth consumption which almost an order of magnitude higher than that of European and Singaporean customers?
Hetzner has been an established player in Europe for a long time. It seems plausible that they have enough customers who use small amounts of bandwidth to subsidise the heavier users.
Considering switching costs, if they enter the US market with better pricing than established players, it stands to reason that the customers that would be most enticed to move will be the heavier users.
Europe is also a lot smaller network wise.
Hetzner only have to get their traffic to Frankfurt to get connected to practically the whole of Europe. For the US, Ashburn N.Virginia is good but it's still only a single coast.
> So, "Pi mal Daumen"* this means that US customers have a bandwidth consumption which almost an order of magnitude higher than that of European and Singaporean customers?
You've written that the wrong way around. You've written the opposite of what Cloudflare writes.
They write that transit bandwith costs are similar in Europe and the USA, but Europe has more peering — it's around 50% of their traffic rather than 20%.
> The corollary is that in Europe transit is also cheap but peering is very easy, making the effective price of bandwidth in the region the lowest in the world.
If you need long term price security, than you need to get a long term contract. The big cloud providers will give you that if you pay them enough in advance, but probably for at least 50 times the price per TB.
If you use 20 TB each month the price will be 25.39€ instead of 5.39€. I can't think of any business that would seriously struggle with this 20€ monthly price increase.
Price increases are not a nice thing, but this one is not catastrophic.
Your traffic bill is increasing by 471% and that's not OK.
Bill increases don't have to be catastrophic to be bad. Remember that businesses/startups range from being well funded to not-funded-at-all-trying-to-survive. Depending on the country, 20€ can be a lot of money.
> Your traffic bill is increasing by 471% and that's not OK.
Your traffic bill is increasing by 20 bucks per month and that isn’t ok? If you’re running any sort of business and that isn’t ok I’m not sure what to tell you.
This. We got hit by a sudden change in a popular SaaS' pricing, from $10 to $75/mo - a 650% increase. We don't have a big margin, if a different provider did this sort of thing overnight, we could be instantly out of business. It's already difficult to build a competitive business even WITH the ability to outsource a class of problems to a SaaS.
I've been a big fan of Hetzner for the last decade, and I understand and agree with their motivation for this change. However December 1st is effectively almost tomorrow, they could have easily given us a month's notice instead.
Ya if you're on the cheapest service and and the next cheapest service is an order of magnitude higher or more then your business is already at risk. It's a sign that it's subsidized and that a pricing shock will happen in the future.
I thought this was to allow them to be more relaxed about the limit (5 per region) which is how they used to control fully free services that cost them.
But an increase for sure - they did note the supply of free ARIN allocations was gone
Right - I’ve been on them since EC2 flat network / simple DB days and was trying to remember if I ever got an email like this.
I know google has jacked rates (maps etc) and killed services (I used their first paas before it was basically abandoned)
I have argued online with folks about their pricing - my point usually being as soon as you try to do Netflix or YouTube on the “Free” or unlimited or ultra low cost providers - you find out it’s a lie.
My impression was hetzner had started null routing customers for “abuse” who used a lot. No idea if that’s true, but used to be the way the “unlimited” VPS providers did it.
I believe they have for very specific services, but never for things like EC2 or RDS.
There are also some EC2 instance classes where upgrading instance types in the same "size" are more expensive, but that is very rare, but I dont believe AWS has ever pulled the rug out from under you.
> There are also some EC2 instance classes where upgrading instance types in the same "size" are more expensive
An increase in price has been the rule rather than the exception for recent upgrades for vanilla instance types, e.g., c, r, m types in the newest generations (6 -> 7 for x86, 6 -> 7, or -> 8 for Arm types).
The increases have been modest though, perhaps around 10%. You get additional CPU and sometimes minor increases in other resources on the newer types.
I think OVH has a more logical bandwidth policy. They give you a certain Mbps cap, and that’s that. I haven’t used them personally, though, so can’t vouch for the experience. I’m curious to hear from folks who have used both providers.
From what I've heard if you actually saturate the link they'll get in touch. I'm not aware of any truly unlimited data transfer plans from VPS providers.
That's usually true if you see the actual costs of the thing.
In the case of data transmission if you were using some data transmission system where you were charged per byte based on the operator's costs (possibly time dependent so the cost per byte might vary depending on the amount of traffic on the provider's network and on the varying real time prices of the networks they connect to) then you would indeed see prices going down over time and performance going up.
Consumers, small businesses, and often even medium businesses generally hate that kind of pricing. They like fixed monthly bills. So providers offer that, setting the amount of data included in that price high enough that most customers won't ever come near it.
That tends to result in the lower bandwidth users actually paying quite a bit more than they would if they had per byte pricing and the higher bandwidth (but not so high as to go over the included data and hit overage fees) paying less than they would under the per byte model.
That can attract more high bandwidth customers and eventually the model of customer bandwidth usage that was used to set the price and bandwidth allowance is no longer accurate and gets adjusted.
Note that this means that price you pay is not just a function of the underlying technology costs--it is also a function of how other people are using the service.
Same thing happens even in non-technology areas. You probably wouldn't go into a fixed price "all you can eat" restaurant just to get a donut and cup of coffee. The fixed price is set to cover people getting full meals. And if a bunch of competitive eaters started coming in every day to do their training at that restaurant you can safely bet that the price is going to go up for everyone or there is going to be an asterisk added to "all you can eat" with a footnote that puts some sort of cap on it.
True, so what gives? Just them wanting more money now that they got enough customers? They probably did some calculations and realized that damn, they could pocket more money so might as well try their luck. Like yeah, let us assume they have 10k customers: 7.05 * 10000 is 70500, 8.99 * 10000 is 89900, that is 19400 USD more for them, and that is just for one!
Or the cause is one step removed, for example the handful of giant companies that control all US internet infrastructure, versus the hundreds all over Europe.
It's not accurate at all. There are far more high tier cloud offerings in the US than in Europe.
Europe has nothing like AWS + Google + Azure + Oracle. Then you can add in a dozen mid tier companies like DigitalOcean.
They also have nothing like Cloudflare and dozens of other large cloud services companies. Europe has a cloud so basic and primitive you'd think they were a developing economic region still struggling to grasp basic software development.
> They also have nothing like Cloudflare and dozens of other large cloud services companies. Europe has a cloud so basic and primitive you'd think they were a developing economic region still struggling to grasp basic software development.
You have no idea what you are talking about.
If you think Europe, which has United Internet(Ionos), OVH, scaleway, and many others is a developing region, you have never seen the hosting market in an actually developing market.
Yeah but if you're running something that is using a ton of bandwidth, presumably it's a service that needs to be online and reliable. Being cheap and constantly cycling out servers introduces complexity to your system. Hetzner could also easily change their terms to close this loophole if it's an actual problem.
Are tariffs already in place or is this just a thinly-veiled scapegoat for haircutting traffic allocation by 95%? To a customer, it certainly feels like a bait and switch to sell a subscription product and once customers are embedded materially change the economic trade.
It's also used in that sense in English (in telecom/utilities, airlines, etc.), just that the political/taxation usage is more heavily covered, especially lately.
It's closer to industry jargon at this point in American English. Search for LTL tariffs, for example, and you'll find a very long list of trucking companies publishing their fees and terms as tariffs.
Yes, that's really funny. But even funnier, I can't think of a 1-1 English word, and even Google translate gives me tariff. It's actually just "price", but in the context of these kinds of services, could be also something like "tier" (but not to be confused with the German Tier :-)).
But that's normal for languages, the meaning of a word can adjust to the point a meaning previously used becomes archaic. It's obvious these two words share the same for lack of a better word gist, but the actual usage diverged later.
In the second example charging 28% more for 90% less traffic, starting in 3 days. That's straight up illegal in some parts of the world, but apparently not in the US?
Is this a signal of a larger pivot in their business model towards targeting a higher-cost US enterprise market? A lot of brands have successfully transitioned to selling the same goods at luxury prices recently-maybe a webhost with a decent enough reputation can do the same.
Probably more they don't need or want the companies gaming this pricing at scale any more.
If you are spinning up a $5/mo VM, using 19.5TB of bandwidth on it, then spinning it down and firing up the next, you are a cost center.
This change boots those customers off the service entirely without having to write complicated ToS. The price change for average customers won't even be noticed on the next monthly bill, so it's likely seen as a win/win at the moment.
At some point the marketing dollars stop getting spent as heavily when you reach a certain market saturation. Calling this luxury pricing is certainly a stretch considering it's an order of magnitude less than the large cloud providers still. It's just not below cost any longer.
I went from being a big fan of hetzner to being pretty angry because of this change and how it was communicated.
The price change is one thing, the MASSIVE change in traffic you get for it is another. Together, they suck. to go from 20Tb to 1Tb feels like a massive bait-and-switch.
That didn't work for a number of reasons (cooking the books), but also network bandwidth is not fungible. Unlike commodities such as oil or natural gas, bandwidth’s value is highly dependent on specific factors like location, time, and network conditions. This variability makes it difficult to standardize bandwidth as a tradable commodity, complicating efforts to create a seamless trading market.
There are a few in the crypto/DePIN space poking at this problem. I remain highly skeptical.
Theoretically would be cool. Basically you have a docker that can run anywhere and you automatically migrate it based on prices between different service providers. The issue is there isn't incentives for the cloud providers to do this, because it wouldn't benefit the incumbents.
Maybe if the government mandated it at some point, like phone number portability was mandated.
That could work for some use cases where you transfer in bulk, like backups, CDN sync, research data transfer, etc. Either auction or off-hours or "spot"/low-QoS.
> customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources
Literally the business model of every "shared resource service model" on the planet. Hetzner's entire business model is built on this... them acting like they're shocked to discover this is... disingenuous at best.
Nobody likes price rises but many companies are doing it due to disappointing year end financials and needing some positive news for next year.
IMO 2025 will a big year for being forced to run lean (no DevOps teams trying to emulate Google, ditching pointless microservices architecture, reducing JavaScript churn etc) and having to be agile in responding to vendor price changes. And of course CTOs desperately thinking AI will reduce the wage bill with no impact
Inflation doesn't explain reducing the included traffic from 20TB to 1TB while simultaneously increasing prices. This is a much more dramatic change than what inflation would justify.
You purchase a 10Gb/s firewall for $100,000 - you will not be using 10Gb/s traffic for the lifespan of this device.
Applying this to Hetzner:
You sell a service with X bandwidth included free because you know that only Y% is only ever used on average.
Now people exploit the X allowance - spinning up new virtual machines to multiply this already generous allowance to get unlimited bandwidth for a fee 1/10000th of other commercial offerings. Your Y% costing is now completely invalid.
You reduce the allowance 20x to mitigate this.
I can't blame Hetzner at all for this, especially when Google/Amazon/Microsoft are printing money with their insane bandwidth costs. You know they are insane when they then change the rules to say it's completely free if you are migrating to a different provider - suddenly it doesn't cost anything at all for egress? Oh, it was actually upcoming monopoly investigations that might have taken a dim view...
>Until this change, customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources. We want to make things more balanced.
Isent this how every ISP works?
You and all your neighbors can subscribe to 1Gigabit because they don't anticipate everyone maxxing out the bandwidth at once?
"data caps" aren't real though from a networking perspective. A router or switch will push packets at line rate speed, not based on the total amount of storage or cap.
As a Hetzner client, any price rise is disappointing. We are compute-heavy, not egress-heavy, user so will be largely unaffected by these changes, but I'm still a yuge Hetzner fan.
> Until this change, customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources. We want to make things more balanced.
I may know one of the culprits -- whom I will leave unnamed here. But the company, who is fairly popular, built out their own CDN via putting a bunch of nginx caching proxies on various Hetzner servers around the world. It apparently was really cheap and very effective. Given that they were bootstrapped and this was prior to Cloudflare really being that popular, it was a great strategy. This was true like 8 years ago, so maybe it has changed in the meantime.
Sounds like a completely legitimate use though. Hetzner were widely telling people about that 20TB limit, so why would they be surprised when people use them as CDN boxes?
Where's the surprise? It's the classic business 2-step - drum up interest with "too good to be true" features, then cut them back. The marginal customers who need those features leave (and are too expensive to keep), everyone else is used to your product and stays.
MBA value extraction 101.
Until you remember that marketing is a separate department from finance which is a separate department from ops/engineering.
The engineers said 20TB in aggregate was fine but likely didn’t consider the “bad apples”. Marketing obviously wants to use the biggest numbers and then finance comes in with the hammer and dev points to egress as an simple way to upset rhe fewest number of real customers.
As an engineer, if you don't qualify whether your answer is average or max, you've messed up.
I'm confident the marketing folks would just say something akin to "shut up nerd", cash their bonuses, and leave you with the problem.
As an engineer, NEVER give out averages without checking that they are consistent with the distribution of the actual data.
Averages tend to skew once exposed to adverse selection.
I think culprits is a poor choice of words since it means someone suspected of a misdeed. I could perhaps understand using it for example for someone that tried to store a petrabyte of storage on a consumer unlimited storage plan. But in this case Hetzner set a specific data usage amount you are paying for so using that amount is not a misdeed.
> I could perhaps understand using it for example for someone that tried to store a petrabyte of storage on a consumer unlimited storage plan.
I couldn't, don't call it unlimited if it's not unlimited, using what you paid for is not a "misdeed".
Then why does this only apply in the US? Are they saying EU customers are well behaved?
It also may depend on peering arrangements Hetzner has. If EU ISP more inclined to peer with Hetzner than US one bandwidth in EU will be cheaper for them.
- in EU there are large peering exchanges to swap traffic
- in USA no peering exchanges exists and you need to pay for your traffic most of the time. Few big operators in US and they enforce this.
Looks like some deal wasn't renewed and they lost a big chunk of cheap pipe or/and some of their upstream providers decided to do something with routing.
probably streaming platforms have better content on the US and everyone wants to exit there? so they are mostly serving US traffic for several vpns all over the world connecting to CDNs in the US.
Isn't Hetzner impacted in Europe at the moment from a cable cut? Wouldn't surprise me if there is a wave of people moving stuff over to the US because of that. I don't know much about cloud though. I believe "The Ship has arrived and repairs are underway, which will still take some time." and "the repair may take up to two weeks.".
Hetzner did pay somewhere around 20% of the cost of C-Lion1, so it wouldn't be surprising if it has hurt hem.
Last I heard from Cinia was that the cable should be fixed by the end of November, so sometime within the next 55 hours.
“Culprits” because they used the service they paid for within its advertised limits?
It’s the same with cloud storage providers. First give out a massive amount of storage and rapidly gain users, then cut it down after blaming people for “abusing” it. How about you advertise your correct capacity to begin with?
They are simply deflecting blame for their own enshittification.
>“Culprits” because they used the service they paid for within its advertised limits?
"Culprits" because it was their (legal) use of the service that made Hetzner rethink and change their service plan.
So then the culprits are the company’s own engineering and marketing departments for not correctly anticipating user demand.
Or you take your best shot and then adjust as needed.
Sure .. also them.
Having said that, I am usually empathetic to these kinds of 'unlimited' deals because even though they aren't really 'unlimited', they do tend to be generous to the average use-case and average user .. Inevitably, and unfortunately, someone decides to test the limits and the entire thing collapses.
It reminds me of the Blockbuster "No more late fees" policy, which was a really good customer-friendly policy (speaking as someone who regularly returned rentals late) .. but then they were sued because an aspect of the policy had Blockbuster charging the cost of the rental to the customer if it wasn't returned in some period of time .. and because that charge looked like a 'late fee' they got sued. Urgh.
It’s not any more possible to correctly anticipate all pricing structure vulnerabilities, than it is to correctly anticipate all program and API security vulnerabilities. There is always a statistical chance of novel outcomes when humans are involved.
Want to give a clue on who the culprit is?
I was curious and checked if they are still using Hetzner. It appears not, so I can share who it was. It was https://artstation.com. Basically heavily oriented towards serving static images, so the CDN could have been really expensive. Doing a reverse IP lookup on cdn.artstation.com servers now resolves to Cloudflare and it has cloudflare headers on the response.
8 years ago, hetzner had no cloud offerings
The dedicated servers still have 20 tb traffic included
Do they have dedicated servers in US?
This is typical of Hetzner, if a product SKU is losing money they very quickly make changes, even going as far as to discontinue the product entirely (eg. GPU servers). They definitely don't seem to be a fan of loss leaders.
I'm guessing somehow the traffic usage patterns of their USA customers was very different to their EU counterparts, or the cost of expanding network capacity was a lot higher than anticipated.
It's a bit of a shock for sure but it seems this model is a big part of how they can maintain their slim margins.
I have no complaints at all about this model. They work out the cost of providing a service, then they charge that cost plus a markup. They keep doing things that make them money. They stop doing things that don't make them money.
It seems like a straightforward way to run a business.
Yep they're the technology equivalent of a discount supermarket. Everything is commoditized to the extreme.
Breath of fresh air in the modern cloud era tbh.
To be fair, given how cheap a lot of Hetzners products (especially Server Auction, my beloved) are compared to the competition, not wanting to have loss leaders seems reasonable to me
Traffic over-usage is $1 per TB, so this is still quite fair, only in singapore is traffic really expensive at $8/TB.
> only in singapore is traffic really expensive at $8/TB.
Expensive by Hetzner standards but still cheap by cloud standards, egress from Singapore EC2 instances is between $80 and $120 per TB for example.
$80!! EC2 is a scam
It's $120/TB for the first 10TB in a month, so you need to be spending >$1200 just on bandwidth every month before you even get the "discounted" rates.
The real savings only come in bulk
In Singapore and Asia in general traffic is very expensive, because there are no peering exchanges. So you need to pay for each Mbps you use. Big ISPs there are oligopolies and aren't too fast or keen to work with you.
That’s very fair. I wish they had put that in the email!
That is right, it would have maybe reduced the public outcry. It just makes it 10$ more expensive per month which is totally OK in my book
so still order or orders of magnitude cheaper than the the big 3 hyperscalers.
AWS drops to $50/TB - still 2x to 10x maybe? A lot of CDNs cost a surprising amount or hide pricing.
>Until this change, customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources.
So... raising the prices for everybody instead?
They're only raising the prices of customers whose servers use more than a terabyte per month. Based on my experience, it's not easy to go over a terabyte of bandwidth for most web services. I doubt the majority of their customers will see any change in price.
Sucks to pay a dollar per terabyte extra if you're downloading a petabyte per month through your hetzner VPN, but this sure beats raising everyone's prices because two or three companies decided to use Hetzner to build a CDN.
This is why you can't offer unlimited anything, and why we can't have nice things.
> They're only raising the prices of customers whose servers use more than a terabyte per month.
It sure reads to me like they raised the base instance price across the board. The biggest increases will be for those using over the new included bandwidth (min 1tb) but they are going up for everyone.
> They're only raising the prices of customers whose servers use more than a terabyte per month.
No they're not? AFAICT if I made a CPX11 using 0.1TB/mo, my price just went from 3.85 to 4.49.
Yeah, I really don't understand that part of the message. It'd make sense if they were lowering prices elsewhere, but now they just... raise them? I seriously don't see how that benefits _anyone_ except Hetzner.
What likely happened here is that they were raising prices due to increased costs for energy and various other costs, and if they hadn't made this change then they would have had to increase the price more, so relative to that it keeps it cheaper for low-traffic customers - and they just communicated this poorly.
Yeah, the justification given makes absolutely no sense - you are paying more than before even if you stay under the new limit (which is 1/20th of the original!)
They also use the word "tariff" several times without elaborating, as if the person who wrote the email doesn't know the actual meaning of the word.
Seems like intentional deception to hide a standard "we just want more money" price raise.
> as if the person who wrote the email doesn't know the actual meaning of the word.
In my country, "tariff" is seen in several contexts:
* A tax on imports, much in the news since the recent US election.
* A pub or bar's price list is known as the "bar tariff"
* Energy companies offer a selection of "tariffs" i.e. agreed contract rates for usage-based pricing. e.g. a 3-year-fixed-price tariff, a 100%-green-energy tariff, and so on.
* The portion of a 'life' jail sentence which must be served, before a prisoner can be considered for parole.
So I don't think it's incorrect to call a price list a "tariff", merely unusual.
> So I don't think it's incorrect to call a price list a "tariff"
I'm pretty sure it is in American English. That usage might be ok in British English, but for Americans that terminology is going to be confusing. Before today, I had never heard tariff used for anything other than import taxes. And since this applies to servers in the US, it would make sense not to use terminology that would be confusing to people in that country.
From what I can tell, in the US energy suppliers talking to one another use the term "tariff" like for example https://www.puc.texas.gov/industry/electric/rates/tdr.aspx
Whereas when talking to consumers they seem to use terms like 'rate' and 'plan'.
Right, only the first usage is mainstream American English. The others are not.
I am curious if the others are British English? Or Indian? Other?
as if the person who wrote the email doesn't know the actual meaning of the word.
The word "tariff" has a few different meanings. I'd say they're using it correctly, just not with the same meaning that the word is commonly being used in the news right now.
In Germany "phone plan" is written as the literal translation of "mobile radio tariff", as a bundle of price and terms.
So it's not unexpected to use the uncommon in English meaning of the word to describe these changes.
Tariff can simply mean "fee". Don't be so proud of your ignorance.
It's not used that way in American English at all; it almost borders on archaic. Given the purpose of this email was to primarily let their American customers know they'd be raising prices on them, it seems unfair to tell someone they're ignorant when they were sent a message containing verbiage that has entirely different meaning to them.
What's wrong with their use of "tariff"? Looks fine to me!
"We just want more money" Is the standard operating procedure and the goal of all for-profit companies. How can hackers not understand this? Of course they will always want as much money as possible, and it is up to you as a customer to decide if their product is worth what they are asking or if you will go to a competitor.
Because hackers are individual human beings, and as such are motivated by a whole variety of reasons, money being just one of them.
When running small companies they still tend to be motivated by other things, such as proving a point, achieving a technical goal or having some cultural influence etc.
It's only when the company grows in size that it becomes this soulless greedy sociopath we are all too accustomed to.
Hetzner grew a lot those last 5 years or so.
> It's only when the company grows in size that it becomes this soulless greedy sociopath we are all too accustomed to.
Most small and medium size businesses also fit this description. And I don't consider a price hike to be sociopathic or soulless. Greedy, sure. But businesses are always profit focused first and foremost.
This thread is where I'm learning that American English uses tariff mainly for import tariffs. Here in India, the most common usage of it is to talk about telecom tariffs - mainly mobile, sometimes broadband. So it didn't even occur to me when reading the question that it might have anything to do with import tariffs, until I read some comments that misunderstood it that way.
Not just mainly, but exclusively in my experience. (Import/export tariffs.)
Until this thread, I have never encountered the term "bar tariff" for a list of drink prices, or "energy tariff" instead of rate. Those uses are simply not American English, and you would be misunderstood.
Hetzner is a German company so I find myself wondering if this is a British usage, or a mistranslation of the German word "tarif" that should be "rate"? (A common mistranslation category known as "false friends".)
TIL: https://en.wikipedia.org/wiki/Tariff_(disambiguation)
One of the most frustrating things about Duolingo is that they refuse to have an International English setting for the language you are learning from. I’m trying to learn french but WTF is a ‘stroller’ or an ‘eggplant’ or even more frustrating are the ones where the word is almost the same in the UK as in France e.g ‘athlétique’ in French is ‘athletics’ in UK English but ‘track’ in US English.
It's perfectly acceptable British English.
21 occurrences of "tariff" on one of British Gas' pages: https://www.britishgas.co.uk/energy/guides/off-peak-electric... ("Your energy provider may offer time of use tariffs and cheaper night-time electricity rates.")
Good to know, so it's an American vs. British thing. Thanks!
Is there any further distinction between a "tariff" and a "rate" in British English? The example sentence you provide uses both, which makes me wonder if there's even more to the picture here.
Without checking, my feeling is a "tariff" is the whole contracted agreement, and a "rate" is a part of it.
An EV electricity tariff might have a cheap night rate, and a more expensive day rate. Another tariff might be entirely variable rate (price changes every hour).
Wiktionary defines a tariff as "A schedule of rates, fees or prices." so I think my feeling is correct.
Unclear to me why you're being downvoted. I previously knew non-US people refer to rates as "tariffs", but I never heard it in a US context. It's not rare, it's just not a meaning of the word Americans typically know.
hotels in India also use the word tariff for room rates, as in, see the tariff chart on the wall behind the reception desk.
I vaguely remember the word tariff being used to refer to fees or duties in a history class growing up, but as you've noted, it's not used this way in American English anymore. When I got the email from Hetzner this morning, I thought they were taking preemptive action against some tariff/sanction that Trump must have announced against EU data companies.
Ah, at first I wondered if this had something to do with Trump getting elected and his claims that he will implement massive (import) tariffs.
Ahh, yes, the good old "here, you purchased X amount of things for $Z. But don't dare to use everything you paid for, or we double the price"
It’s not an individual customer thing. It’s a subsidy for early customers to get market share > raise prices.
So... enshittification :)
Hetzner have definitely always been scumbags about the bait & switch on aspects of their service like that. Granted it's pretty typical of the too good to be true rule of life.
I have only had and have heard of great experiences with Hetzner. For both their offerings snd their support. I am based in Europe though.
I can't think of a single other instance of bait and switch with Hetzner and we run a fair bit of infra with them.
Been using them happily for a few years. They’ve been rock solid and cheap. Can’t complain, even about this hike.
Do you have any details? I was about to move all my services off from vultr to hetzner due to the much better pricing
I’ve had several servers with them for years now - private and VPS, and they do what it says on the tin.
Vultr still seems to charge several times as much for bandwidth as Herzner.
> for other customers who have used much more resources
So, "Pi mal Daumen"* this means that US customers have a bandwidth consumption which almost an order of magnitude higher than that of European and Singaporean customers?
I wonder what it consists of.
* π x thumb = ballpark figure
Hetzner has been an established player in Europe for a long time. It seems plausible that they have enough customers who use small amounts of bandwidth to subsidise the heavier users.
Considering switching costs, if they enter the US market with better pricing than established players, it stands to reason that the customers that would be most enticed to move will be the heavier users.
EU transit costs and peering agreements are much more relaxed and cheaper than in US
Europe is also a lot smaller network wise. Hetzner only have to get their traffic to Frankfurt to get connected to practically the whole of Europe. For the US, Ashburn N.Virginia is good but it's still only a single coast.
They are definitely paying under 2c/TB for traffic though.
> So, "Pi mal Daumen"* this means that US customers have a bandwidth consumption which almost an order of magnitude higher than that of European and Singaporean customers?
I wouldn't be amazed if Hetzner benefits significantly from peering, which is much more widespread in US than in Europe. Interesting piece on this from Cloudflare: https://blog.cloudflare.com/the-relative-cost-of-bandwidth-a...
It's quite possible that their costs really are significantly lower in Europe. No idea what things are like in Singapore.
You've written that the wrong way around. You've written the opposite of what Cloudflare writes.
They write that transit bandwith costs are similar in Europe and the USA, but Europe has more peering — it's around 50% of their traffic rather than 20%.
> The corollary is that in Europe transit is also cheap but peering is very easy, making the effective price of bandwidth in the region the lowest in the world.
Really? Peering is very big in Europe, we have like 10+ CIX operators with 20+ locations in Germany alone.
When has AWS done something like this?
LB11 going from 20TB to 1TB for the same price is wild if you’d built a business on this platform.
It's easy to never raise prices if you have 1000% markup.
The point remains, if I was a customer who had planned my budget on the previously lower rates, this move’d be very disruptive.
Herzner is an established player, not a startup, this either shows a lack of regards for customers, or that they aren’t very well run.
If you need long term price security, than you need to get a long term contract. The big cloud providers will give you that if you pay them enough in advance, but probably for at least 50 times the price per TB.
If you use 20 TB each month the price will be 25.39€ instead of 5.39€. I can't think of any business that would seriously struggle with this 20€ monthly price increase.
Price increases are not a nice thing, but this one is not catastrophic.
In % terms though?
Is 500% on 5 bucks a lot?
Your traffic bill is increasing by 471% and that's not OK.
Bill increases don't have to be catastrophic to be bad. Remember that businesses/startups range from being well funded to not-funded-at-all-trying-to-survive. Depending on the country, 20€ can be a lot of money.
> Your traffic bill is increasing by 471% and that's not OK.
Your traffic bill is increasing by 20 bucks per month and that isn’t ok? If you’re running any sort of business and that isn’t ok I’m not sure what to tell you.
This. We got hit by a sudden change in a popular SaaS' pricing, from $10 to $75/mo - a 650% increase. We don't have a big margin, if a different provider did this sort of thing overnight, we could be instantly out of business. It's already difficult to build a competitive business even WITH the ability to outsource a class of problems to a SaaS.
I've been a big fan of Hetzner for the last decade, and I understand and agree with their motivation for this change. However December 1st is effectively almost tomorrow, they could have easily given us a month's notice instead.
You have until Feb for your existing infra, so that seems fair to me.
Yes,that is OK. It's still much cheaper than the alternatives.
Ya if you're on the cheapest service and and the next cheapest service is an order of magnitude higher or more then your business is already at risk. It's a sign that it's subsidized and that a pricing shock will happen in the future.
If it’s a competitive market you’re almost certainly exploiting some sort of anomaly that t will probably go away.
While perhaps not like this, AWS has from time to time ensured average rate goes up or introduced charges for something previously free:
https://www.prnewswire.com/news-releases/aws-and-azure-cloud...
https://aws.amazon.com/blogs/aws/new-aws-public-ipv4-address...
https://aws.amazon.com/about-aws/whats-new/2024/11/new-featu...
See notes 1 and 2: https://aws.amazon.com/cognito/pricing/
Never. I don't think AWS have _ever_ icnreased prices.
They have, but usually it is via introducing additional fees to services/transactions, eg:
https://www.astuto.ai/blogs/understanding-the-aws-public-ipv... https://www.wiv.ai/navigating-the-rising-tide-of-aws-pricing...
The IPv4 charge is a good one!
I thought this was to allow them to be more relaxed about the limit (5 per region) which is how they used to control fully free services that cost them.
But an increase for sure - they did note the supply of free ARIN allocations was gone
It's a matter of perspective, I don't do IPv6, when AWS decided to start charging for IPv4, I moved to Oracle Cloud.
AWS also charges multiples the price to begin with. I mean, the "scam" of AWS has always been the absolutely outrageous network egress pricing.
AWS raised the prices (/slashed the free tier) for Cognito literally last week[0], in a way that's quite similar to Hetzner.
[0]: https://saasprices.net/blog/aws-price-rise
Right - I’ve been on them since EC2 flat network / simple DB days and was trying to remember if I ever got an email like this.
I know google has jacked rates (maps etc) and killed services (I used their first paas before it was basically abandoned)
I have argued online with folks about their pricing - my point usually being as soon as you try to do Netflix or YouTube on the “Free” or unlimited or ultra low cost providers - you find out it’s a lie.
My impression was hetzner had started null routing customers for “abuse” who used a lot. No idea if that’s true, but used to be the way the “unlimited” VPS providers did it.
IPv4 charge caused me to have to redesign some things and cull servers for some projects.
I decided to move to Oracle Cloud when they made that move.
I believe they have for very specific services, but never for things like EC2 or RDS.
There are also some EC2 instance classes where upgrading instance types in the same "size" are more expensive, but that is very rare, but I dont believe AWS has ever pulled the rug out from under you.
> There are also some EC2 instance classes where upgrading instance types in the same "size" are more expensive
An increase in price has been the rule rather than the exception for recent upgrades for vanilla instance types, e.g., c, r, m types in the newest generations (6 -> 7 for x86, 6 -> 7, or -> 8 for Arm types).
The increases have been modest though, perhaps around 10%. You get additional CPU and sometimes minor increases in other resources on the newer types.
I think OVH has a more logical bandwidth policy. They give you a certain Mbps cap, and that’s that. I haven’t used them personally, though, so can’t vouch for the experience. I’m curious to hear from folks who have used both providers.
From what I've heard if you actually saturate the link they'll get in touch. I'm not aware of any truly unlimited data transfer plans from VPS providers.
Weird, one would expect that in anything related to technology either prices go down, or performance goes up over time.
That's usually true if you see the actual costs of the thing.
In the case of data transmission if you were using some data transmission system where you were charged per byte based on the operator's costs (possibly time dependent so the cost per byte might vary depending on the amount of traffic on the provider's network and on the varying real time prices of the networks they connect to) then you would indeed see prices going down over time and performance going up.
Consumers, small businesses, and often even medium businesses generally hate that kind of pricing. They like fixed monthly bills. So providers offer that, setting the amount of data included in that price high enough that most customers won't ever come near it.
That tends to result in the lower bandwidth users actually paying quite a bit more than they would if they had per byte pricing and the higher bandwidth (but not so high as to go over the included data and hit overage fees) paying less than they would under the per byte model.
That can attract more high bandwidth customers and eventually the model of customer bandwidth usage that was used to set the price and bandwidth allowance is no longer accurate and gets adjusted.
Note that this means that price you pay is not just a function of the underlying technology costs--it is also a function of how other people are using the service.
Same thing happens even in non-technology areas. You probably wouldn't go into a fixed price "all you can eat" restaurant just to get a donut and cup of coffee. The fixed price is set to cover people getting full meals. And if a bunch of competitive eaters started coming in every day to do their training at that restaurant you can safely bet that the price is going to go up for everyone or there is going to be an asterisk added to "all you can eat" with a footnote that puts some sort of cap on it.
True, so what gives? Just them wanting more money now that they got enough customers? They probably did some calculations and realized that damn, they could pocket more money so might as well try their luck. Like yeah, let us assume they have 10k customers: 7.05 * 10000 is 70500, 8.99 * 10000 is 89900, that is 19400 USD more for them, and that is just for one!
Or the cause is one step removed, for example the handful of giant companies that control all US internet infrastructure, versus the hundreds all over Europe.
Yeah, so that probably means the count of users is higher than the previously assumed 10k. They can do it, so they will do it.
Not when there is a duopoly on one market (US) and hundreds of companies on other (EU).
This case is for a EU company's offerings to the US. Why would they make themselves less competitive?
How is there a duopoly in the cloud market in the US?
It's not accurate at all. There are far more high tier cloud offerings in the US than in Europe.
Europe has nothing like AWS + Google + Azure + Oracle. Then you can add in a dozen mid tier companies like DigitalOcean.
They also have nothing like Cloudflare and dozens of other large cloud services companies. Europe has a cloud so basic and primitive you'd think they were a developing economic region still struggling to grasp basic software development.
Do you know that AWS uses other companies data centers in many places in the EU?
Your ignorance must be blissful.
> They also have nothing like Cloudflare and dozens of other large cloud services companies. Europe has a cloud so basic and primitive you'd think they were a developing economic region still struggling to grasp basic software development.
You have no idea what you are talking about.
If you think Europe, which has United Internet(Ionos), OVH, scaleway, and many others is a developing region, you have never seen the hosting market in an actually developing market.
The old allowance always struck me as unusually generous tbh
They recently changed to bill by the hour. Not hard to destroy and reprovision once you're near the traffic limit.
Massive loophole.
They don't pro-rate the included traffic quota for servers that don't run a full month?
No.
Yeah but if you're running something that is using a ton of bandwidth, presumably it's a service that needs to be online and reliable. Being cheap and constantly cycling out servers introduces complexity to your system. Hetzner could also easily change their terms to close this loophole if it's an actual problem.
You can automate it with zero downtime on kubernetes.
And since internal traffic is free, you just need to cycle the ingress servers.
Pay for the cheapest instance, get 20TB of egress. Churn em and burn em.
I bet that costs more than 20€ to do
Are tariffs already in place or is this just a thinly-veiled scapegoat for haircutting traffic allocation by 95%? To a customer, it certainly feels like a bait and switch to sell a subscription product and once customers are embedded materially change the economic trade.
It's the language barrier. The German word Tarif doesn't mean the same as the English word tariff.
It's also used in that sense in English (in telecom/utilities, airlines, etc.), just that the political/taxation usage is more heavily covered, especially lately.
Well actually one meaning of the English word tariff is the same as the German meaning, although it's not as widely used. To quote Wiktionary:
> tariff (plural tariffs)
1. A system of government-imposed duties levied on imported or exported goods; a list of such duties, or the duties themselves.
2. A schedule of rates, fees or prices.
3. (British) A sentence determined according to a scale of standard penalties for certain categories of crime.
...so Hetzner's usage of the word is technically correct™, even though native speakers might not use it in this context.
It's closer to industry jargon at this point in American English. Search for LTL tariffs, for example, and you'll find a very long list of trucking companies publishing their fees and terms as tariffs.
It's completely normal usage in Britain.
"I changed electricity provider to one with an EV tariff."
Yes, that's really funny. But even funnier, I can't think of a 1-1 English word, and even Google translate gives me tariff. It's actually just "price", but in the context of these kinds of services, could be also something like "tier" (but not to be confused with the German Tier :-)).
I’m not sure the meanings are really different. It’s just that tariff usually refers to import duties in the US.
People arguing that’s the only US meaning are just wrong though
But that's normal for languages, the meaning of a word can adjust to the point a meaning previously used becomes archaic. It's obvious these two words share the same for lack of a better word gist, but the actual usage diverged later.
No, it's not just price, the entire structure of pricing changed.
I meant the German word is price, sorry for being unclear.
By tariff they just mean contract pricing, not the tax kind.
This has nothing to do with any possible trade wars or trade tariffs.
The word tariff is often used in telecom to indicate rates and fees for some given quantity of services, and that seems to be the use here.
In the second example charging 28% more for 90% less traffic, starting in 3 days. That's straight up illegal in some parts of the world, but apparently not in the US?
The pricing applies immediately only for new customers. For existing ones, it applies from Feb 2025.
That ain't exactly a very long timeline either.
Is the traffic pricing per instance or aggregated?
So would having multiple servers but one going over the 1 TB limit cause an overage, or do they look at the total across all servers?
Per instance.
Is this a signal of a larger pivot in their business model towards targeting a higher-cost US enterprise market? A lot of brands have successfully transitioned to selling the same goods at luxury prices recently-maybe a webhost with a decent enough reputation can do the same.
Probably more they don't need or want the companies gaming this pricing at scale any more.
If you are spinning up a $5/mo VM, using 19.5TB of bandwidth on it, then spinning it down and firing up the next, you are a cost center.
This change boots those customers off the service entirely without having to write complicated ToS. The price change for average customers won't even be noticed on the next monthly bill, so it's likely seen as a win/win at the moment.
At some point the marketing dollars stop getting spent as heavily when you reach a certain market saturation. Calling this luxury pricing is certainly a stretch considering it's an order of magnitude less than the large cloud providers still. It's just not below cost any longer.
I would love to see a VPS with transparent upstream costs so we have some idea of what's fair.
See also:
https://news.ycombinator.com/item?id=42264668
https://news.ycombinator.com/item?id=42264789
I went from being a big fan of hetzner to being pretty angry because of this change and how it was communicated.
The price change is one thing, the MASSIVE change in traffic you get for it is another. Together, they suck. to go from 20Tb to 1Tb feels like a massive bait-and-switch.
I thought of giving a recommendation here but I fear that they would raise the prices too... :|
That's exactly how these things spread - as soon as one provider gets called out for good value, they seem to "adjust" their pricing.
Hetzner had these good prices for decades now.
They are still dirt cheap for cloud and dedicated
I would think an auction system would be the best system to price bandwidth.
Enron tried this in the late 90s/early 2000s.
That didn't work for a number of reasons (cooking the books), but also network bandwidth is not fungible. Unlike commodities such as oil or natural gas, bandwidth’s value is highly dependent on specific factors like location, time, and network conditions. This variability makes it difficult to standardize bandwidth as a tradable commodity, complicating efforts to create a seamless trading market.
There are a few in the crypto/DePIN space poking at this problem. I remain highly skeptical.
Theoretically would be cool. Basically you have a docker that can run anywhere and you automatically migrate it based on prices between different service providers. The issue is there isn't incentives for the cloud providers to do this, because it wouldn't benefit the incumbents.
Maybe if the government mandated it at some point, like phone number portability was mandated.
It’s also bad for customers because you wouldn’t have predictability in your cost structure.
That could work for some use cases where you transfer in bulk, like backups, CDN sync, research data transfer, etc. Either auction or off-hours or "spot"/low-QoS.
> customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources
Literally the business model of every "shared resource service model" on the planet. Hetzner's entire business model is built on this... them acting like they're shocked to discover this is... disingenuous at best.
Nobody likes price rises but many companies are doing it due to disappointing year end financials and needing some positive news for next year.
IMO 2025 will a big year for being forced to run lean (no DevOps teams trying to emulate Google, ditching pointless microservices architecture, reducing JavaScript churn etc) and having to be agile in responding to vendor price changes. And of course CTOs desperately thinking AI will reduce the wage bill with no impact
Inflation, the real inflation is 10%
Inflation doesn't explain reducing the included traffic from 20TB to 1TB while simultaneously increasing prices. This is a much more dramatic change than what inflation would justify.
Things are rarely priced at actual face value.
You purchase a 10Gb/s firewall for $100,000 - you will not be using 10Gb/s traffic for the lifespan of this device.
Applying this to Hetzner:
You sell a service with X bandwidth included free because you know that only Y% is only ever used on average.
Now people exploit the X allowance - spinning up new virtual machines to multiply this already generous allowance to get unlimited bandwidth for a fee 1/10000th of other commercial offerings. Your Y% costing is now completely invalid.
You reduce the allowance 20x to mitigate this.
I can't blame Hetzner at all for this, especially when Google/Amazon/Microsoft are printing money with their insane bandwidth costs. You know they are insane when they then change the rules to say it's completely free if you are migrating to a different provider - suddenly it doesn't cost anything at all for egress? Oh, it was actually upcoming monopoly investigations that might have taken a dim view...
>Until this change, customers who have used fewer resources have covered the costs, in a way, for other customers who have used much more resources. We want to make things more balanced.
Isent this how every ISP works?
You and all your neighbors can subscribe to 1Gigabit because they don't anticipate everyone maxxing out the bandwidth at once?
For speed that's how it works, but not for data caps.
"data caps" aren't real though from a networking perspective. A router or switch will push packets at line rate speed, not based on the total amount of storage or cap.
As a Hetzner client, any price rise is disappointing. We are compute-heavy, not egress-heavy, user so will be largely unaffected by these changes, but I'm still a yuge Hetzner fan.
Same here - their compute pricing and performance were excellent value compared to the major cloud providers.
[dupe]: https://news.ycombinator.com/item?id=42264668