Hetzner cuts traffic on US VPSs, raises prices

Their email makes sense, except it doesn't. As someone who considers themselves a low traffic usage customer, running hundreds of Hetzner Cloud servers - each averaging less than 10GB of data transfer, with only a few servers reaching the previously included 50-60TB/month - I’m now facing an overall increase in costs.

Not only are the per-server prices higher, but the drastic cut in included bandwidth (without a corresponding option for bandwidth pooling) means I'll be paying significantly more despite my usage being well within "low traffic" by their standards. It’s frustrating that Hetzner never introduced a bandwidth pooling option for customers where it would make sense, especially in scenarios like mine where usage is highly imbalanced across servers.

At this point, Vultr and Linode are starting to make a lot more sense, even with their more expensive traffic pricing, since both providers offer traffic pooling. This feature would have significantly softened the blow of Hetzner's pricing changes, but instead, they’re pushing costs onto loyal customers who don’t fit neatly into their new model.

Possible theory why they did it: To my understanding, you don't pay for traffic, you pay for network capacity. Maybe US instances aren't getting the uptake they had hoped for, and they are looking lower some costs by reducing their network capacity (they are a very German company and care a lot about efficiency).

Hetzner is very cheap and still profitable because classic "economy of scale" and vertical integration. They own, build, and operate all their data centers. This comment goes into more details[1], but it's possible this doesn't really work out in a foreign location like US.

[1]: https://forumweb.hosting/13663-why-are-hetzners-dedicated-hosting-servers-so-cheap/post-90812.html ↗

This seems to be a huge PR blunder. As a single data point, I have to say that my first reaction is illogical.

I have two hetzner shared instances and I am royally pissed by the 20x reduction in traffic allowance. It is also irrelevant to me: over the last 12 months I never exceeded 1TB. My unhappiness on the traffic reduction is purely of a "what if I start using more" type. For which two rational answers is "well you can explore alternatives then" and "d'oh, your average is way under 100GB, it's not going over 1TB". But I still started looking at alternatives.

My feeling is that the reduction is aimed at a small group, but upsets a much larger set of customers who now will start looking for alternatives. Which indicates a typical marketing screwup. My 2c.

This has nothing to do with Hetzner. It's because of the US tariffs.

"I’ve been a big fan of Hetzner. Unfortunately they’ve made a feeble attempt to dress this change up in the name of “fairness”."

Hetzner is a company know for it's precise pricing structure. An increase in prices would be correlated to an increase in costs, and in fact the next paragraph Hetzner writes:

"With the new tariff structure, we want to make conditions for our customers around the world as fair as possible "

Bottom line, the US imposes tariffs, this increases the prices of imported products, of which Hertzner is one, (Servers from Europe)

How can you write an entire article to complain about a price increase and not see that it was actually your country that increased the price.

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.