Budget dedicated price increases — the slow squeeze is real

Got my renewal from Contabo yesterday. Same E3-1230v5, 16GB, 2x2TB SATA I've been sitting on since 2019. Price went from $35 to $49. No hardware change, no network upgrade, nothing. Back when I started in this business twenty years ago, you shook hands on a price and that number stuck until the hardware literally caught fire. Kids these days just accept the monthly email saying "adjusted for market conditions" like it's weather. Mark my words, this is the third hike in eighteen months and it won't be the last. The cheap dedicated box is going the way of the /24 giveaway. I'll be on a NAT VPS eating ramen before 2028.

IP lease market cleared $55 per address last week on the wholesale side. Providers aren't eating that, you are.

Power draw is the real killer nobody talks about. That E3-1230v5 Harold's sitting on? 80W TDP, plus chipset, plus those old WD Reds pulling 6-7W each. Call it 120W at the wall. Three years ago datacenter power was 12-14 cents per kWh. Now? 22-26 cents in most metros, and that's before the summer peak surcharges hit. My last pallet of R630s, I had to pay a fuel surcharge on the shipping that was 18% of the freight cost. Provider's not wrong to pass some of that through. But a 40% jump in one go is greedy. Should've been gradual, $3 here, $4 there. The hardware itself is depreciated to zero by now. They bought that node for $800 five years ago.

Picked up a Dell R730xd last month:

• 2x E5-2680v4
• 256GB DDR4
• 12x 4TB SAS (48TB raw)
• H730P RAID

$340 shipped, plus $22/month colo at a buddy's place. ZFS raidz2, compression on, dedup off because I'm not insane. The Contabo box at €49? 2x2TB is a joke. For €49 you can find Ryzen 5 3600 dedicated with NVMe now if you hunt. The squeeze is on the lazy renewals, not the hunters.

I've been with Hetzner for a while and wanted to share what I'm seeing on current dedicated server economics.

My understanding of their cost structure for a typical entry-level node (E3 v5/v6 generation, 16-32GB RAM, 2x2TB SATA) over the past 24 months:

• Colocation power: +34%
• IP transit blended rate: +12%
• IPv4 lease per address: +89%
• Hardware replacement parts (SATA DOMs, NICs, backplanes): +22%
• Remote hands minimum charge: +15%

From what I've heard they absorbed the first two pricing cycles internally. The third cycle requires partial customer adjustment. Effective April 1, 2026, their Budget Dedicated line will see increases of €8-14 monthly depending on configuration.

They are introducing a legacy loyalty rate for customers with 36+ months continuous tenure. Details will be emailed separately.

Official account shows up with bullet points, love to see it. "absorbed internally" yeah that's going straight to the yacht fund.

Trust me I feel this

Breakdown of my current spend:

• 8 dedicated: avg $41, was $29 in 2022
• 23 KVM VPS: avg $4.20/TB storage, $2.10/GB RAM
• 14 NAT boxes: $8/year each lol
• 7 "dedicated" that are really shared cores (looking at you, RackNerd)

The math: my dedicated spend went from $232 to $328 in 3 years. For that money I could add 18 more 4GB VPS at GreenCloudVPS or drop 4 dedis and buy a used R620 off ebay. Already started moving the non-DB stuff to VPS. 2TB NVMe KVM for $7? Yes please. The squeeze is real but only if you let them squeeze you

IMO the loyalty rate is worth asking about if you've been somewhere long-term. YMMV though, some providers won't budge and that's their right. Take it with a grain of salt, but I've had decent luck just opening a ticket and asking politely. Worst case you're where you started. The auction server route @steveipw mentioned is solid if you have somewhere to put it, but factor in your time at something like $20/hr and the break-even gets messy fast. I've done both. No strong feeling either way, depends on your setup and how much you enjoy tinkering versus just having it work.

The provider's stated +89% per address aligns with ARIN secondary market data I have seen, but European legacy holders with direct RIPE allocations are in a different position. This may explain why some competitors, particularly those with older European IP stock, have not moved prices as aggressively. From a Datenschutz perspective, I would note that the loyalty rate program introduces a data retention question. How is tenure calculated, and what customer records must persist to prove it? The GDPR Article 5 principle of storage limitation applies. I would request clarity before opting in.

Contabo budget dedi, NYC metro:
ping 1.1.1.1: 2.3ms
ping 8.8.8.8: 3.1ms
traceroute to hetzner.com:
  1  core1.nyc  0.4ms
  2  peer.nyc   1.2ms
  3  * * *
  4  target     12.7ms  <-- route via Cogent adds 8ms vs direct

GreenCloudVPS VPS same city:
ping 1.1.1.1: 1.8ms
route via internal anycast, no Cogent hop

Route via Cogent adds 12ms in practice for cross-country. Not the price, but if you're moving to VPS check your paths. Some budget dedi networks are actually better than cheap VPS oversubscribe. Numbers first, price second.