OVHcloud, Hetzner adjust pricing amid memory cost surge

Europe’s budget cloud market is undergoing a structural shift as two of its largest providers adapt to rising hardware costs. OVHcloud and Hetzner have taken divergent approaches—one by unbundling essential components from its pricing, the other by withdrawing its most affordable offerings from sale—both citing the same underlying pressure: a sixfold increase in memory costs over the past year and a corresponding rise in storage expenses.

What changed

OVHcloud revised its Public Cloud pricing model effective October 1, separating local disk storage and public IPv4 addresses from its compute instances. The hourly rate for Generation 3 instances (B3, C3, R3) remains unchanged, but customers now pay additional fees for storage (€0.0001458 per GB per hour) and IPv4 (€0.0027 per hour). The company’s internal calculations show monthly costs rising between 1.4% and 21.9%, depending on instance size. For example, a B3-16 instance (4 vCPU, 16 GB RAM, 100 GB storage) now costs €87 per month, up from €75—a 16% increase—while a C3-8 instance (same vCPU, 8 GB RAM, 100 GB storage) rises from €67 to €79, an 18% jump.

Hetzner, meanwhile, has taken its Cost-Optimized cloud servers offline. The CX and CAX lines—previously the cheapest virtual machines in Europe—are now marked “Currently not available” on its product page. A status notice, open since June 26, attributes the restriction to “high demand and limited availability of required hardware.” The company has not provided updates on when the servers might return or which existing customers are affected.

Why costs are rising

The root cause is a supply crunch in server memory. Industry analyst TrendForce reported on September 30 that conventional DRAM contract prices are projected to rise 10–15% in the fourth quarter of 2026, as suppliers prioritize high-margin server products over consumer markets. OVHcloud explicitly cited memory costs as the reason for its pricing changes, stating in an August announcement that “buying memory costs us six times more today than it did a year ago, and storage is following the same trajectory.”

Hetzner had already raised prices three times in 2026 before withdrawing its cheapest servers. A June 15 adjustment increased the cost of its CX23 instance from €3.99 to €5.49 per month (a 37.6% rise) and its CAX11 from €4.49 to €5.99 (33.4%). More expensive instances saw even steeper hikes: CPX22 jumped from €7.99 to €19.49 (144%), and CCX13 from €15.99 to €42.99 (169%).

Impact on operators

For resellers and SaaS providers, the changes introduce new cost pressures. OVHcloud’s unbundling applies to existing instances, not just new deployments, meaning current customers face immediate price increases. Hetzner’s supply constraints, meanwhile, force operators to either wait for availability or migrate to more expensive alternatives. The European budget cloud market, which had maintained a 60–75% price advantage over US providers, is now effectively narrower, as the cheapest advertised instances are no longer purchasable.

Scaleway, another European budget provider, raised prices in June after three years of stability, citing “significant price surges in raw hardware, particularly storage and RAM.” The trend suggests that further adjustments may be necessary if memory costs continue to climb.

What to watch

The memory market remains undersupplied, with no immediate relief in sight. TrendForce’s forecast indicates that server DRAM prices will continue to rise, albeit at a slower pace, as suppliers focus on high-performance products. For cloud providers, this could mean further unbundling, supply restrictions, or price increases in the coming quarters. Operators should prepare for ongoing volatility in hardware costs and plan accordingly for both short-term budgeting and long-term infrastructure decisions.