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Writing that comment made me appreciate Lowendtalk providers who still are eating the costs and these growth points/margins simply because they are purely and utterly passionate about the community.
Shoutout to all my lowendtalk providers during these tough times who joined this industry with passion and still have passion and not doing these solely and purely for growth but for the long term as I feel like long term, this decision is really respectable from a more human perspective and I hope that after this winter of ram crisis, they are rewarded just as much.
Much love to the lowendtalk provider community. Writing that comment made me realize how underappreciated you all are (ngl as I thought about all of this for a hour and made data as I like to analyse some data to arrive at conclusions and this is sort of the conclusion that I arrive at
)
Gotta respect the respected gentleman for being willing to wade in here, so I don't want to give him too much grief. But I have to say I lol'd (no, literally) at the bit about "permanent price" not actually meaning permanent price but this other thing that also doesn't mean permanent price.
gg, well played!
Now hetzner's price increase doesn't look that bad.
The deals with 100% upgrades have to be paid in any way. G13 surely comes soon.
Wow, even vServer Lite, VPS pico G11s 1€/m -> 1,18€/m
I've noticed @RoyaleHosting only has AMS listed now for VPS after being out of stock for a while. IDK if its related but this market is brutal and I feel bad for anyone trying to get into this industry or progress themselves. This shits tough.
That means existing users will give Netcup more liquidity for expansion so you can order more servers and offer them to new customers. And I am happy for Netcup to grow. However as it has been said here before. The server where my VM is running on did not suddenly increase in price. Energy did not get more expensive. New server hardware got more expensive. And new servers are sold to new customers. So new customers should pay the price it realistically takes to offer the service under new circumstances. And if new customers come in slower, that's what it is for Netcup.
I don't know I get it, Alex, but it still feels a little unfair to existing users to increase prices that heavily.
First of all many thanks to all of you who took time to respond. I try to address most of the issues. Please let me know if I miss anything.
It's a mixed calculation. To ensure good speed of our services, your VMs are moving between large clusters of hosts. Adding servers at higher cost, increased the total calculation even tough existing remain the same.
Fair point. The wording was not good enough and I take responsibility for that. I can't undo it, but I can make sure we communicate more precisely going forward.
You are right, and that's exactly how we're handling it. Every customer can cancel, no exceptions.
I see that you are angry and I understand your point. If I wouldn't care, do you think I would be here to respond to your question? I am here to get your feedback and make it better next time.
What would have been your solution? I'm seriously open to ideas.
I am sorry that you had this experience. If you want to share your feedback, send me your ticket please and I look into it.
This is not our style of business to get benefits out of that situation.
Increasing pricing and make customers like you angry, does not help to grow. I guess you see that in this thread.
netcup is privately held. No investors. No private equity. No need for shareholder value.
I tried to address some of your points. I cannot answer on terms of financials.
In general we try our best to offer the best pricing that is possible with the best possible quality. I am fully aware that you guys are choosing netcup because of the good pricing.
Now we had to increase pricing - in almost 25 years it has been the second time that we really had to increase pricing.
I'll start by being upfront that I'm not a netcup customer. I've been tempted a few times, but I'm glad I missed out on those occasions now.
The simple point is that you don't need to grow. You already have customers earning you the whatever profit, on already paid for hardware. If you don't grow, your ongoing costs are just energy, upstream network, support and occasional hardware failures.
Maybe you have excessively high failure rates (which would be indicative of earlier problems), but most hardware is extremely reliable and I'd maybe expect a disk failure on average once ever 5 years from a personal perspective.
Instead, you have made the corporate decision that YOU MUST GROW. For that you need to buy more stuff, and the prices for that is currently high. But let's be absolutely clear, that growth does exactly NOTHING for your existing customers. All it does is fuel your corporate greed and bonuses for growing the profit year on year. You're not content to just raise prices in line with inflation, you want more, because that translates to higher profits and higher bonuses.
But you could also make the choice to not grow, just continue as you are. Raise your prices in line with inflation - compare Hetzner and OVH doing 3% rises. You'd still make your healthy profits, adjusted for inflation. You'd still be a successful company.
Again, there is no reason to penalise your existing customers just because you want more growth.
Sorry, that is bullshit. It's not that the wording "was not good enough". Either you were lying then, or you just don't care about honouring your promises.
People who will be affected those won't see this as the very generous concession that you think it is. You aren't doing anything that you're not legally obliged to do.
Giving a customer a choice "pay an extra 20% tax or we'll stop you from using it at all within a month" isn't a nice gesture, it's extortion plain and simple. Hopefully enough of your customers are in a position to switch to another provider before the renewal price so they're not locked in to the extortion.
You are attempting to firefight the PR. You are only doing that because you're realising too late how terrible this money grab looks. But, let's be clear, you're not changing anything or actually doing anything to change what you've announced, you're trying to calm people down by acknowledging you will do the minimum legally required and trying to paint that as being generous.
Simple. Increase existing customers prices in line with inflation only.
If you want to take a gamble that your customer base will increase this year, buy more servers and charge a higher price for those new customers. You will probably get fewer newer customers than your previous projections, but they will be buying it because they've decided that it still represents good value to them.
If you don't want to take that gamble that you can get new customers at the higher price required to pay for the extra resources for those new customers, just accept that your profits will only rise by inflation this year.
Actually showing loyalty to your customers like that will mean they might show loyalty to you. Treat them like shit, and expect them all to leave.
Your actions suggest otherwise. You're not happy to get the same profits next year as this year plus inflation. You demand more profits at the expense of your existing loyal customers.
I think the point is that you are seeing the backlash and starting to realise it too.
And yet here we are with you increasing prices 18%, a whopping 15% over the headline inflation price, for equipment that is already purchased.
Surely as the CEO, you should be perfectly placed to answer in terms of financials.
This should not be in the present tense. An across the board price increase of 18% for all customers just to fund growth is not the best possible pricing, and people won't continue choosing you.
Anyway, you do you. I'm not a customer anyway. I certainly won't be becoming one now. I'll stick with my OVH and Hetzner dedis, with only 3% rises.
oh god this sucks, im paying full pricing from the website, not any discounted product or from sales, now im going to be charged extra.
100% uptime in all locations except Germany. A 20% increase is not excessive. What's not right is that it's being applied to current yearly contracts.
With all the rant you have quite a selective memory, don't you?
Didn't you comment on the 30-50% price increase with Hetzner and OVH non-dedies as well?
I'll gladly take it off your hands, if you don't want it anymore ;-)
There's another option: optimize the stack. Do more with current resources. Port it to C, use good webp/avif, etc
@ralf well written comment Kudos. These are all points I agree to actually.
@ralf said: Simple. Increase existing customers prices in line with inflation only.
All seriously great points. Couldn't have said it better myself although I tried from a more statistical approach to find and saw how Netcup profits millions of dollars from this. (Well Profit in the sense that they use all of that to get to the growth thing which is the second point that you mentioned about YOU MUST GROW essentially)
for context, If they are unable to provide financial data, then I have to rely on my rough estimates of the fact that they are going to make 8 million $ from all of this which then goes back to all of the points that you mentioned.
THIS! As much as Netcup might try to project that they are loyal to their customers, all the financials and everything don't point out as such from my rough understanding or they didn't need to charge 17% eggregious surcharge.
The reality is that Netcup isn't loyal to their customers as you mention and your point stands brilliantly.
Netcup does not need to be loyal (nor does OVH or Hetzner). this isn't about growth but about demand and keeping your business steady.
it is not like they are a bakery that can produce the same bread with the same ingredients for a hundred years. hardware has a lifecycle and ten years later everyone wants to be on an EPYC with DDR5 and not a XEON with DDR3 anymore.
of course you can probably stretch lifecycle periods or raise density for a while to handle demand. but if you just stop selling, you will disappear from the market. simply because you are not handling any demand anymore and will not be recognized anymore.
it also is not as simple as pinning it to inflation. if you would agree to that, that means they should increase each year according to inflation, like e.g. leaseweb does. I assume you are totally fine with that and would not cry each year again?
let me quote LETs most beloved question: "is it recurring?"
however, if you are fine with a yearly increase based on inflation, then 18% now should be nearly okay for you as well, as that comes close to the accumulated inflation since 2022, when they last increased their prices. right?
so it does not matter if they are loyal. and don't be naive, no big provider is "loyal".
quite the opposite, potentially all of them (OVH/Hetzner/netcup) are even grateful for cheapskate legacy clients leaving right now, because that makes room to handle demand of others that happily pay more.
Just had my Pico renewed.
Will price increase on 1.5. or on next renewal (8.3.2027)?
I'm to stupid to understand due to the weird "it's monthly pricing but prepaid for 12m" thing netcup does
We understand the price increase due to rising costs; however, when will the backend interface be made more user-friendly? I will continue to make purchases once a more optimized backend dashboard becomes available.
it can be confusing indeed if you look at three things in parallel like pricing, billing and contract term:-D
however it is as simple as "increase on next invoice" (after may 1st)
as for piko the actual billing period is same as contract term. yearly. so you'll be affected by this increase only on next renewal in 2027
anyway i am moving to more US based providers, europe is f.ked. Energy prices are getting out of control in woke green europe.
You wish, it still does a good job, especially RETN.
If I ever wanna let it go, you be first.
It’s perfectly normal for long-term customers to defend their rights. And let’s be real: Netcup isn't going to pay you a dime for all this effort you're putting into defending them.
Calling us "cheap" or "stingy" is ridiculous. We had a fair deal that both parties agreed upon. Suddenly demanding a "pro-rata surcharge" for the remaining time on an active contract—do you honestly think that’s ethical?
Regarding your point about hardware upgrades: I haven't upgraded, and I don't need to. Why should I pay for an "upgrade" I’m not even using? This extra cost won't kill us, but who's to say it will stay stable? Will the prices drop back down when RAM costs decrease? I highly doubt it.
I don’t care about OVH or anyone else; I’m not their customer. We shouldn't lower our expectations just because everyone else in the industry is acting like garbage.
Do I still need to pay the price increase for a server for which I’ve already paid a year’s worth of fees?
sure
Is this a robbery? Are they going back on their word after the deal has already been closed?
I think they're trying to raise prices and are deliberately saying that even those who have already paid need to make an additional payment, but they'll eventually clarify that those who have already paid in full don't need to pay anything extra.
sure, I never objected to that, just trying to put it in perspective.
true, they won't. and I don't expect them to. I am customer of them and the others too. but I am also a business and provider myself, so know the other side as well and try to not just live in me own little bubble. otherwise it'd be pretty hypocrite.
I never said it's ethical or not. people tend to get far too emotional. if "ethical" is a criteria for you, I suggest you find another provider that indeed lives up to that expectation. let me know, when you found one.
see, that is exactly hypocracy.
you only care about your own scenario, use case and wallet. you do not really care about anyone else, other customers or other players in the industry. do you honestly think that's ethical?
we need a netcup refugee thread. With super chicken deals. @DediRock @dustinc @ColoCrossing
Sure, exactly my point, so we don't have to be loyal to netcup either.
you only care about your own scenario, use case and wallet. you do not really care about anyone else, other customers or other players in the industry. do you honestly think that's ethical?
Oh the irony, Netcup isn't loyal about us and only cares about their wallet and I showed you stats of how netcup earns million dollars from this 17%.
The irony that its not ethical for us to think of our own scenario but its completely ethical for Netcup to think of only its own scenario.
Now, see this IS hypocrisy.
Yeah, imagine us saying in the middle of the contract period we won't pay the 100%. They won't accept that too. Clearly no client focus, just cost based accounting/engineering.