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Netcup Price Hike
jorohe6515
Member
in General
Netcup just announced a price hike for existing and new customers:
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Dear netcup Community,
three weeks ago, I gave you an update on the RAMpocalypse here in this forum. At the time, our hope was to get through this crisis without a price increase.
Here's the update, and I'll keep it short: We need to increase prices for a portion of our products.
I know this isn't great news. That's why I want to explain as transparently as possible how this happened and what it means for you in concrete terms.
What happened?
The background is familiar to you: The memory market is being bought out by large AI corporations, manufacturers are prioritizing the highest-margin buyers, and everyone else is left waiting. The price increases are primarily driven by the three major memory manufacturers.
Back in October last year, we secured our server orders for all of 2026 and contractually locked in our pricing. Until a few weeks ago, we were firmly convinced that this would be enough to weather the crisis.
Then it fell apart: Over the course of February, our suppliers informed us that the agreed deliveries would not take place unless we pay a triple-digit percentage surcharge. Otherwise, our servers would be allocated to customers willing to pay that price. Our legally binding contracts were clearly violated.
After lengthy negotiations, one supplier agreed to reduce their surcharge a bit and deliver enough servers for at least this year.
We were left with two choices: Either be unable to offer you any new servers for the next one to two years, or adjust prices and remain able to deliver. We chose the latter. We had no other option, as our margins are not large enough to absorb the increase entirely.
What does this mean in concrete terms?
Existing contracts: +18.51%
New contracts: +24.33%
Local Block Storage and Server Storage (existing and new contracts): +21.52%
In Euro terms, here's what this means for existing customers on the most common products (net, 12-month pricing):
Product Previous price New price Difference/month
VPS 500 G12 4,09 € 4,85 € +0,76 €
VPS 1000 G12 7,10 € 8,41 € +1,31 €
RS 1000 G12 8,74 € 10,36 € +1,62 €
Why existing customers too?
I know this is the part that hurts the most. Your server is there, it's running. Why pay more?
The answer: Your servers don't exist in isolation in the rack. We continuously integrate new hardware into our products, for spare parts, for capacity, for quality assurance. When a RAM module or SSD in our server fails, we replace it of course. But these replacement parts now cost us many times what they did when your server was first set up. It's a blended calculation: We continuously purchase new hardware to ensure we always have sufficient capacity for you and that quality doesn't decline.
We could have passed the entire cost increase on to new customers alone. But that would have made an identical product 40-50% more expensive for new orders than for existing contracts. That wouldn't be sustainable in the long run, and it wouldn't be fair either. That's why we opted for a moderate distribution: existing contracts increase significantly less than new orders.
If you look at the European hosting landscape right now, you'll see that we are well below what other providers are currently implementing.
Affected products
This adjustment applies exclusively to products directly impacted by the hardware and memory crisis.
VPS
Root Servers
Additional storage
Web hosting (also runs on server infrastructure with RAM and SSDs)
Prices for network products and licenses remain stable. Domain prices continue to follow the usual adjustments by the respective registries.
What's the process?
You will receive an email for each server in the coming days, where you can decide whether you'd like to cancel. That is of course your right. If you choose to keep your server, the adjusted price will take effect no earlier than 01.05.2026, or with the first billing period following that date.
As always, you're hearing it here in the forum first. Tomorrow we will officially announce the increase, update prices on the website for new orders, and then begin sending out emails to existing customers.
What does the future look like?
The memory market remains tight. We are monitoring the situation closely and will, as you've come to expect from us, inform you early and transparently if there are further developments.
One final word
We also briefly considered simply increasing our overbooking ratios, keeping prices the same, continuing to run promotions, and using this as an opportunity. That's not our strategy, and we are firmly convinced that's not what you want either.
We are a company that has always stood for excellent price-to-performance, and that's not going to change. This increase ensures that you continue to get high-performance products at a fair price. Not watered-down quality at an optically unchanged price.
I'm happy to answer your questions, hear your suggestions, and also your criticism right here.
Comments
This the new normal until 2027-2028. There's no avoiding it
A 17% increase for already customers is tough. For small $'s the difference between 17% and 24% might just be a few cents but its the large customers who are already on netcup who would be the most troubled by this.
Imagine if you are using netcup as a host or some other hosts who have raised the prices so the expenses of your businesses went up 17% all because of the AI ram crisis.
Still a dick move by the suppliers. Netcup isn't at fault here. I hope they can sue for breach of contract.
There's nothing you can do. 1 T will be spent on AI until 2027. Naturally, the price will rise
I do think that german law is quite strict so its wild to see extortion practices by the suppliers there as well and I agree that its mostly the suppliers extortionist practices which are at fault here. Had to look up but it seems that switzerland and singapore have even harsher penalties against such extortionists so it will be interesting to see if the providers specifically located there/having suppliers there might be able to fulfill their contracts without any issue, it might be interesting to go see that.
At this point, I genuinely don't care. Pop the bubble now, we have good enough open source models and we are gonna get them better by more distillation/general efforts. Anything the people can do to pop this bubble?
I will paste a comment I have written somewhere else but all of this is blame on Sam Altman:-
My understanding is TLDR: The stargate project had OpenAI,Oracle,Softbank etc.
Softbank got the money from Japanese bank loan0 at low interests rates and actually scrambled to find the 20 Billion $ (they commited combined with oracle to around 500 billion $)
(Btw The datacenter thing is being done in a similar fashion by Oracle)
Almost all of that money when given to OpenAI was used/(will be used?) to commit 20% of the Ram supply of the whole world at a more expensive package because these companies just package ram in different order to get "AI ram" and then Micron shuts down the consumer brand (Crucial)
This has now caused Ram prices to spike 5 times the cost in a couple of months back. Also, the inflation is happening in hard drive and just Nand in general.
The largest impacts I can see that is that even companies like google were scrambling to find Ram. I find this to be one of the larger reasons why they might need so much ram all of a sudden. I mean Google and Anthropic were needing Ram but not 20% of it and not committed in such a way and I am not sure if datacenters are even being built for ram to be stored1
OpenAI datacenters in Argentina for example is operated by such a shady company that came like 1-2 years ago IIRC. So a 500 Billion $ Project is just picking any random companies ... Yea no, I have the belief that they don't trust it themselves especially when a company is scrambling for money.
All of this does feel very cartel/monopoly-ish to me to push the competitors out of the market or the people running open source models out of the market and another benefit of it for OpenAI all was that we normal everyday people get impacted too and I am sure that when they made such a large decision, they must have internally thought about it but we all know the morality of OpenAI now after the DoD deal.
But I don't think that google and other companies are that impacted by it all it seems as well. Only the average consumer and Hosting providers (Thus seeing OVH,Hetzner raise prices for example). The average AWS/GCP/Azure makes enough money that they might not even raise money for sometime and they'll be fine having another additional benefit that more people worried about increasing prices would go to Microsoft Azure/GCP/AWS even more so.
Edit: Gamers are being pushed out of consoles and everything too and some are saying seeing the cloud connection and AWS coming out and saying that we want Gamers on cloud (paraphrasing) as meaning that its all done to move everything to cloud.
I do believe that this might be only half the story as OpenAI does benefit from everything moving to the cloud (somewhat) but its done even more to prevent competition in the whole genre as well.
I believe that they thought about it and treated it as a plus point but before all and everything, it helped them thought that it can help them maintain their flimsy lead in AI models as more and more catch up by having a more monopolistic lead by stifling competition by rising prices 5 times. Gamers and normal people were just the largest casuality in this crossfire.
I was thinking in the past month when I found all this that damn, OpenAI's morality sucks and they did all of it on purpose
And then they had the department of defence* deal and the whole controversy surrounding it so yeah, that too.
OpenAI doesn't want your benefit. It wants its profit and when these are conflict, OpenAI doesn't care a cent about you, not anymore than the cent that you give it.
TLDR: Its literally just OpenAI which singlehandedly intentionally caused the price increase.
Oh and that too btw using people's money by exploiting japanese bank's cheap interests loopholes but essentially the money in japanese banks is still of the people who invest/save their money in the banks.
From the Taliban playbook, do nothing.
Ahhh, just take this as teaser from my planned thread
1. The bubble is based on the assumption of exponential future growth.
2. Commoditization is happening right now
3. Token pricing is deflationary, and Jensen confirmed crazy deflationary curve.
4. By waiting for less than a year, you could save substantial amount of token bills
5. Look around, every market leaders is announcing double, triple usage for free.
This is a well-written and transparent email from Netcup, I applaud them for that.
can we start low end semiconductors and do cheap ram because at this rate im gonna crash out fr @jbiloh any thoughts on funding my project
Warranty exist for parts replacement. Quality decline should not be a factor since it's supposedly "dedicated core". Capacity issue should not affect you, but limit new orders.
Here the real reason, it would have make them uncompetitive. If I bought a house sometimes ago and the price was lower, is it unfair for those who buy a house today? I understand that's rental, but they are pushing it a bit with the fairness. If anything it's unfair to pay for future customer increase in amortization cost on their newer hardware.
I understand their business decision, but I never like the explaination they put around it. Appreciate the fact that they keep lower price for existing service.
Probably. It also makes for an interesting game theory problem:
"How much can we raise prices for existing customer before we lose more customers than we make?"
The only moat they have is the pain of migrating. Any contract longer than a month become null and void upon unilateral changes.
You make a solid point.
Some providers do write into their terms / contacts that prices may rise but no more than x percent per year, this still makes any contract valid unless their increase does go beyond that x percent in that year it would still be valid
Consider this hole announcements beginning with cancellation of flash deals where 99% planned to avoid angry faces.
I (as end user) can also cancel (violate) the exist 'fixed period contracts' for similar, unexpected reasons? For example: big inflation, higher/new taxes, etc. (irony!).
Or they would answer: "we don't care how you do it, but you must pay, because have a valid contract". This is why I not like the 'fixed period contracts'. It (looks like) protect the provider only.
(Of course I understand the reasons, and I know, I can cancel my exist services in the current case),
How much did the 1€ get hiked?
I read a headline a month ago about ram price setting up to explode. I was laughing without a worry in the world. I don't need ram and had no idea that weeks later it could impact me.
A bit of the story..
Alex Windbichler just wants to become a billionaire like Martin Hetzner.
I really hope that upcoming Chinese DRAM manufacturers like CXMT will use this opportunity to flood the Western market with cheap(er) RAM. I'd love to see Micron / Hynix / Samsung wet their pants when that happens.
It gets worse .. don't blow up any ballons for your kids birthdays this year. helium is next..
The Iran War Could Trigger a Global Microchip Crunch
https://oilprice.com/Energy/Energy-General/The-Iran-War-Could-Trigger-a-Global-Microchip-Crunch.html
It’s no surprise that prices are going up.
Suppliers might be passing on costs from upstream factories like Micron and Samsung. Even Apple has to swallow the price hikes from memory and storage vendors.
I bought a root server plan 3 months ago and one of the main selling points that was listed directly below the server specs in large font was "Permanent price"...guess that was total BS.
That is also BS. A brand new EPYC Turin server will have warranty on the RAM and NVMe for enough years into the future to get past this AI turmoil.
What they are really saying is that they want to continue expanding their business at the same rate as before this hardware crisis and are not willing to slow down, so of course that requires jacking up the price on existing users to fund this continued growth.
The other option is to sit tight on their current supply and only raise prices for new VPS purchases but that would decrease upper management's bonuses for not showing year-over-year growth.
I found the black sale page on the web archive.
Now "Permanent Price" just seems like some sort of false advertisement
https://web.archive.org/web/20251126092413/https://www.netcup.com/en/deals/black-friday
Edit: no matter how transparent they are, they have violated their own terms.
my bill is 42 euro per month , now i have to pay like 50 euro per month
Whether it's for existing or new VPS contracts, price increases are applied as a fixed percentage. This means that the impact is less pronounced on the more affordable plans.
For clients utilizing higher-priced VPS options, the cost impact will be more significant.
Well, that's unavoidable, I suppose...
Yes, freeze price no longer exists.
The memory pricing these days is crazy.
P
If netcup specifically offered permanent prices and are now failing to achieve so. As others have said, doesn't it breach the terms of service for the contract or at the very least be counted as fake advertising?
Price increase is permanent, unless you think it is logical to not take more money if given.
To be honest, I do think that Micron is setting up production in 2027 factories. Ram Industry is hard to scale up and down.
Technically, they will still sell the ram to AI companies at a markup but they will then also be able to sell it to customers.
Although these companies are also having a field day, chances are that ram prices might stabilize.
On the other hand, the incentives of the suppliers are the most rent-seeking as we can see from the netcup and (other companies). its usually the suppliers which might betray for more profits and break contracts for example in my opinion.