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Wrong. All business is for profit. There is no sense to make business and not seek profit at all costs. Electricity crisis was a good example of how "we are forced to increase price" works - once it increased, it never goes down. People just adjust to new reality within few months, because their salaries also (usually) go up. Everyone starts charging more. And that's how new baseline is set. 7$ has gone long time ago, I guess pre-pandemic it was already evident that with normal companies you can't get 2c/2c/80gb/1gbps servers for 7$.
I am looking for a provider that drops all prices in percentages, including for existing customers, when hardware prices go down.
First hetzner now netcup, oh well. Time to hide on at-home self hosted metal.
Seems like if you grabbed black friday offers with 6month contract, it just so happens that it renews after the price increase
Yes you should all cancel you're contract, and go play outside it's really fun outside. Stop making company's rich over you're own back.
listen if you're making money off your vps, increase your prices too. if not, cancel.
discount protips only $7
Can all the affected parties - OEMs and Service Providers band together and file a class action lawsuit against OpenAI and Microslop for blocking the global RAM supply with money they don't have.
If the US DoJ wasn't a clownshow right now, they would have instigated an enquiry into the RAM supply choke and cartel like arrangements among the "Big 3" memory suppliers.
They are bombing other countries, do you think they have time for this?
What's to investigate? They all have decided they have more profitable markets to service than retail customers.
If the US (or any) government wants to compel companies to produce more RAM for retail customers, they can only do that by punishing US companies who won't or providing incentives like subsidies to companies (US or foreign) to do so.
Just let it play out. Assuming the Chinese government doesn't restrict RAM exports (which they might do just to punish the US), I'm sure cheaper Chinese companies will take up the load as quickly as they can ramp up production, and then once those brands have more of a market share and proven reputation, the previous big players will find themselves facing far reduced demand when the AI market dries up and they come running back to the traditional market. They presumably have calculated that the current prices they can charge are worth that risk (at least in the short term).
That said, netcup have really screwed over their existing customer base with this. I totally agree with this:
This is pure greed driven by a mindless quest for growth rather than being happy that they have a stable income stream. The real failing of capitalism is that it produces management that cannot accept consistent revenue as enough - it always has to be growing, which is fine but customers are not an infinite "resource".
Raising prices by 18% for existing customers when everything is already paid for, just to subsidise selling to NEW customers is outrageous. I sincerely hope netcup has a mass exodus of customers. And I'm calling BS on the replacement hardware argument. Unless they are buying junk in the first place, the failure rate won't be anywhere near high enough to justify this markup. It's just pure profiteering.
The price raise to existing customers is pure profit and done because they deem they can. More likely than not, new customers aren't even subsidized. I mean, why would you sell to any customer at a loss?
Raise prices for existing users to drive them away, free up server capacity, and sell at a higher price. Good job.
ya they win either way
I think that netcup might still be used by people/projects especially for projects which can be bandwidth intensive. (Ionos does seem an interesting option as well)
If there are projects which require that bandwidth, maybe they might still go even after 20% but these will definitely be low tickets
It might be interesting if enough people cancel netcup subscription and not enough people come into netcup to fill that empty space.
Will they offer a deal then? This all feels really silly to me in the sense that even if they give a deal, how can we trust them to not have a bait and switch again when they mentioned prices would remain permanent.
I have shilled netcup quite a lot on many forums. I had the 8$/3 months deal through their adventcalender offering and was quite happy with them even though my service might've been idling for the most part.
It's a shame how and where netcup is going sadly. It would be nice if people try to take a stand in here
It seems that all Netcup,OVH,Hetzner have raised their prices.
So within the high egress market, I think Ionos and buyvm are having for customers to atleast have a say in to prevent such price rises and to have somewhat of a say.
I would love if other people can comment high bandwidth providers again. My list is OVH,Hetzner,Buyvm,Netcup,Ionos
They are already "using the opportunities":
Besides that there numerous similar articles about "gaming laptops" with 32 GB RAM for 200 eur, S24 Ultra smartphones with 16 GB RAM and 1 TB storage, tablets like Lingbo Pad, "authentic Kingston" and QWQ / Somnambulist / Jaster microSDs, etc.
Hey everyone,
Alex here, CEO of netcup. First time posting on LET, long time reader.
I've seen the Wayback Machine links and the discussion about "Permanent Price" on our sale pages. I understand why that's frustrating, so let me be straight with you.
"Permanent price" meant that the discounted sale price is your real price going forward – not an intro offer that jumps to a higher regular price after your minimum term. That's what we were communicating and that's how it has always worked. It was never meant as "we will never adjust prices under any circumstances for the lifetime of the product." But I'll own this: the wording was not precise enough, and I can see how it reads differently, especially now.
That said – every affected customer will receive an individual email and has the right to cancel if the adjusted price doesn't work for them. No penalty, no tricks.
On the increase itself: I explained the full background in the netcup forum. Short version – our suppliers broke their contracts with us, demanded triple-digit percentage surcharges on already agreed orders, and we had to choose between raising prices or not being able to deliver any new servers for the next 1-2 years. To be clear: we are not making money on this. We're absorbing a significant part of the cost increase ourselves – what we're passing on is the portion we simply cannot cover without running the business into the ground. Our margins were single digit before this and they're lower now.
Happy to answer questions here.
Alex
Hi Alex -- thank you for joining. We're happy to see you here at LowEndTalk, and hope that you enjoy the level of discourse that we provide.
We've gone ahead and doubled the price of your provider tag.
$7/yr when? ©
Not too surprising honestly. Feels like price increases are becoming pretty common across the market lately, especially with infrastructure and energy costs still being higher than before. I guess the bigger question is whether the overall value is still there after the increase.
Hi Alex,
It sucks that your vendors stiffed you. I truly hope you get them for breach of contract.
I'm all for charging what the market will bear and I don't think you should run your company at a loss or subsidize anyone.
That being said, it just doesn't sit well with me that you stick your existing customers with the bill. They have done nothing to deserve this, their costs didn't go up. Sure, get them at renewals and new orders, but it'd be much more fair play to let them ride out their contracts.
However, that's just my opinion. You do you.
A new dishonorable tradition that is gaining ground real fast: Raise prices for existing customers when everything is already paid for.
That's really low.
I thought, that is actually what they do. price increase on the next renewal, no?
or did I miss anything?
if it would be in the middle of the contract term I agree, that this would be rather irregular and worth checking, if it is covered by their AGB.
at the bare minimum this would grant a right to cancel immediately and not be bound to the remainder of the contract term anymore anyway.
PS: just checked, it is in there:
so even mid term of contract, they reserved the right for an increase, just with a six week announcement and bound to the next payment. lucky if you are on a yearly payment I guess...
The part where they raise prices midcontract.
That's what the CEO just confirmed.
yeah you are right, I just checked and it's indeed the next payment, not the contract renewal. it's covered by their T&C though. probably most of the larger/newer contract don't have a difference between billing period and contract term anymore anyway.
good for the smaller services that are on yearly payment (e.g. piko)
Hey Alex, welcome to LET.
Permanent price means, the cost of the service will be same price till the user cancels it. What you mean is, price won't increase after the contract period ends. But you know that already. Because you should have elementary level English to not understand what "permanent price" means. Stop trying to fool people with "oh but it doesn't mean that" bullshit.
Wow what a fucking saint are you now. Were you planning to force people to pay increased prices because they are in contract with you. And now you are trying to play it cool that they can leave their offers freely, as a gesture?
Legally, if provider breaks terms of conditions of the contracts (against customer) then customer is free of that said contract. That's what customer laws state in EU. So you are not doing anyone a favor
That sounds like a business problem of yours. Let me translate this to less corporate language: We have to shaft our current customers, else we won't be able to profit.
I hope someone takes you to court for your false advertisement btw.
You shouldn't have promise people "permanent price" this easily then. But im sure you don't really care as they are free to leave now if they don't like the prices.
Such a bullshit company.
where oloke to get this fixed
Soo true,
because their misleading advertisement, now I have to spend days to transfer to another hosting company that will be honest and respect their existing customers
Edit: and in addition, now I have to pay extra money to get a new servers for a company. This is really unethical (and illegal)
And tbh, if your upstream provider of your company @awindbichler violated the contract and tries to raise price, do you think you should pass this part of the cost on to your customers? Does this sounds reasonable for you?
I recently had to use Netcup support and found it to be even worse than OVH. This price increase and the manner in which it was implemented are the icing on the cake.
I think idlers wil surely cancel and move
My friend, I have a question to ask. You mention single digit margins but now you are raising 17% for existing customers, assuming anywhere from (1-9)% margin, you are going to make 18 times to ~3 times more margin after raising the prices 17%
Another thing of charging 24% extra for the new customers.
From your own website: https://www.netcup.com/en/about-netcup/figures
if we imagine the average ticket size of 15-20$ for the 3 products you mention (Please share with us the exact average ticket size if possible)
So I am assuming 20$ and then you raise ~17% which is 3.4$ extra.
3.4 * 200_000=680_000$ per month or 8_160_000
so approximately 8 million dollars?
Am I correct in reaching these numbers, can you give me an official number if possible?
And you have 24% for new customers additionally as well.
Now I have another question: How much does a ram stick cost for netcup before and after? (I would love to get some data over the 300% markup)
From my rough understanding, Ram prices of 32GB DDR4 feel at 200-250$ to me, even giving the benefit of doubt at 250 for a huge company like netcup we will have 32 THOUSAND sticks of 32 gb ram which can be purchased
I am assuming a average ticket size of 16gb ram costs but it can very well be 8gb too: So we are assuming that this profit alone can take worst case 64 Thousand people.
Now this is a question I have no expertise of and something that the providers here at lowendtalk can help in discussing but on average, I see a mature cloud provider grow anywhere from 20-25% but I am willing to give benefit of doubt to netcup that it grew yoy by 30% (I am not familiar enough to properly comment on it so I would love to hear your thoughts)
But we are forgetting that we just went through covid which had truly made everyone need hosting and it was the best periods of this business to create these previous stats of 25-30%
So is netcup doing this not for survival but rather for trying to have the same numbers as possible even during a time of crisis just as it did during a time of boom, at the cost of old consumers?
This might be true because netcup/anexia group might have private investors/angel investors who might've grown (accustomed?) to such growth.
Till this point, we even discounted the fact that new customers are charged more than 24%
What happened with your supplier is sad and I hope you can sue them but to me it feels like, netcup is trying to grow the same during a time of crisis that it did during a time of boom for its private investors/growth rate at the cost of charging its old customers and somehow even more and charging them in aggregate almost 8 million $ or more.
Rather than the fact that netcup is struggling to grow itself. No the problem is that netcup has to grow at massive unsustainable covid time rates which makes my numbers make sense.
This doesn't feel very understanding of the average customer at netcup who joins it to save money. Netcup is affordable and that's one of its most major MSP to get to this 200_000 customer number who trusted netcup previously.
And we were all still discounting the fact that netcup charges 24% more to the new customer.
TLDR: I would love to gain some answers on some questions to better get understanding of the financials at the situation but to me/us it seems that netcup is charging the customer more both old and new to gain money and also get some very high numbers of new users at the cost of old users for mostly the benefit of private investors to get the growth numbers that they are accustomed to during times of profits.
(PS: I used to use netcup, I had vouched so many times on forums for your company for free thinking that you charge the most affordable rates which was free advertising, all these numbers really flip that equation now and put a genuine dent on affordability if you increase prices by 20%)
Edit: I wish to write another point now that I am thinking about it:
Netcup is a private business and their stock price at the moment within tech industry is defined by their growth in future so in a way they are doing it to grow their stock price / maybe preserve it which is definitely a business thing to do.
So my main point is that Netcup is a business which has thought of its own incentives and will earn 8 million dollars from all of this. You are a person/business too so you should think about your own interests too.
Netcup has definitely written the message with carefulness and the numbers are precise for a reason to still be tolerant from people of the whole situation.
I don't have a problem with netcup being a business. But I think that the point is that this is intentionally designed to somehow charge you more but just enough that you might not leave if you aren't aware.
Its really a psychological effect and I feel somewhat similar to prisoners dilemma, moving to a different host is a hassle so netcup is effectively asking you, is it the hassle if we raise our prices 17% and if they position it as something which is completely beyond their own hands then people are more likely to forgive them but it will be interesting to see after my comment when people realize that netcup is doing this specifically to still keep on growing and earning 8 million dollars or more to gain 60 thousand customers to grow at massive rates during a time of crisis within the industry at the sole cost of existing customers of netcup who trusted them.
I would love to get some more stats from @awindbichler .
about 20 cents, gonna declare bankruptcy.
Any refugee deals?