Colocation prices up 30-40% across the board — anyone else seeing this?

Just got my renewal for 4U colo in two facilities. Both quotes jumped 34% and 38% respectively. Same rack, same 2x 20A 208V circuits, same 1Gbps blend.

My gear:

• 2x Dell R740xd, dual Silver 4216, 256GB RAM each
• 1x Supermicro 846, 24-bay, Xeon E5-2680v4
• Total draw at the rack: ~1.8kW average, 2.4kW peak

Was $285/U/month all-in. Now $390/U. Facility cited "utility cost adjustments and market-rate power revisions." One of them tacked on a new "sustainability compliance fee" too.

Anyone else getting blindsided? I ship my own pallets so I know freight is up, but this is power and space both. Wondering if I eat it or start looking at secondary markets.

For that money you get into the range where auction storage servers start looking interesting again

My last two Supermicro 6049P-E1CR36L boxes:

• 36x 3.5" bays
• 2x Xeon Gold 5118
• 512GB DDR4
• $1,400 each shipped

At your new colo rate that is 3.6U worth of rent for a whole server. Obviously you still need drives and power but the math is shifting. Used to be colo won on TCO if you ran it 4+ years. Now maybe 2 years before buy-and-replace beats the hike.

I am watching the 60-bay stuff too. HGST He10 10TB drives at $65/ea if you buy 20+. ZFS raidz2, 480TB raw, 400TB usable. For that money you get a lot of cold storage.

Back when I started in this business, colocation was a simple equation. You paid for the rack, the power, and the pipe. No sustainability fees, no market-rate adjustments, no nonsense. Twenty years in this business, and I have watched the industry "innovate" its way into every pocket it can find.

The power excuse is half-true. Yes, utilities have risen. But the real squeeze is artificial scarcity. Data centers are holding space for AI training clusters at premium rates, and your 1.8kW of legacy Intel is not sexy anymore. They would rather fill that 4U with four H100 nodes at 10x the revenue.

Mark my words: within eighteen months we will see "legacy workload surcharges" for anything drawing power without a GPU attached. The kids these days think this is normal. It is not.

Hetzner has observed similar dynamics across their three facilities. I would like to share what I've gathered from their operational perspective.

Primary cost drivers in 2026:

• Commercial power rates increased 22% year-over-year in their primary market
• Transformer and switchgear lead times extended from 12 weeks to 34 weeks
• AI/ML deployments now represent 47% of new power commitments versus 11% in 2023

Their pricing adjustments:

• Standard colocation: 18% increase effective Q3 2026
• High-density colocation (10kW+ per rack): 9% increase
• Long-term lock pricing: Available at 2025 rates for 36-month commitments

They have also introduced power-capped plans for legacy workloads. Details at hetzner.com/colo-legacy

1. We renewed 8U in SJC and 12U in ORD last month. Increases were 19% and 31% respectively, so your 34-38% is on the high end but within observed variance.

2. The facilities with on-site generation (natural gas or fuel cell) showed lower increases than grid-dependent sites. Our SJC location has Bloom Energy solid oxide fuel cells installed 2023. ORD does not.

3. We locked a 5-year deal in late 2024 at 2024 rates plus 2.5% annual escalator. That contract now looks favorable. Recommendation: if your provider offers multi-year locks, model NPV at 6% discount rate. The break-even on commitment length has shifted from 24 months to approximately 14 months given current trajectory.

4. One practical note: audit your actual power draw. Our R640 fleet was rated 750W but measured 410W average after BIOS power management tuning. We renegotiated one contract from 2x 20A to 2x 15A and saved 11% before the hike even hit.

Lol same

I run 52 boxes, mostly KVM NAT VPS at $12-18/year each, but I keep 2 dedis for "serious" stuff. One is a Ryzen 5600X with 64GB at some place in Texas, was $45/month now $58. Other is an old E3-1230v5 that I colo myself, that one just went from $80 to $110.

My math:

• Dedi in texas: $58/64GB = $0.90/GB
• Colo E3: $110/64GB = $1.72/GB plus I own the hardware
• My cheapest VPS: $12/1GB = $12/GB but 512MB plans exist

So the dedi still wins on $/GB but the gap is closing. If colo hits $140 I'm probably selling the E3 and buying another cheap Ryzen dedi. Or just spinning up more 512MB NAT boxes, I have 3 more providers to try this month.

The real problem is I have 4x 4TB drives in that colo box. Moving 12TB is annoying. Maybe I just pay the idiot tax.

Which facility is the $110 colo? I need cheap power.

What blend is that 1Gbps, cogent or mix?

34% is utility costs? Sounds like margin padding.

I thought the same, so I asked for the breakout. Facility A showed me their ComEd commercial rate rider from January 2024 to January 2025: $0.089/kWh to $0.112/kWh, so 26% on power specifically. The other 8% they called "labor and insurance escalators." Facility B is in Wisconsin and would not break it down, just pointed to their tariff schedule.

The sustainability fee is $18/U/month and covers "renewable energy certificate procurement and Scope 2 reporting." I asked if I could opt out. They said no, it is a site-wide operational requirement now.

Mix at the Chicago facility. Cogent plus HE plus local peering. The Wisconsin one is Cogent only, which is part of why I am less happy about the increase there.