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Scaleway will increase prices in Dec 2022 due to rising energy costs in Europe
13 points by rany_ on Oct 21, 2022 | hide | past | favorite | 4 comments
I have a feeling this might not end well for European hosting companies.

I received this email from Scaleway:

Like many companies, rising energy costs are having an impact on our business. The main reason for this increase is due to soaring gas prices (directly linked to the Ukraine conflict) and, in France specifically, to maintenance delays concerning national nuclear reactors. In the spirit of full transparency, we would like to inform you that, over the Q3 2021-Q3 2022 period, we already experienced an 85% increase in our electricity costs, without affecting your invoice. Unfortunately, the current geopolitical situation suggests that energy prices will continue to rise in 2023.

In addition to energy prices, growing inflation is significantly increasing all costs which are essential to the running of our business. Despite our commitment to offering the best price/performance ratio for our services, we are now forced to increase our prices.

Thus, as of December 1, 2022, we will increase the prices of our offers by an average of 10% for most existing Scaleway solutions (Dedibox and Public Cloud). We have decided to apply this increase by targeting specific product categories and service ranges. We will communicate the detailed list of pricing changes per product line in the next few days.



> I have a feeling this might not end well for European hosting companies

To be fair: So far, price increases in most cases only affect cheap hosting providers like Hetzner, Scaleway etc.


Which is the case for all European hosting companies.

Basically the rest of the market is US companies flooded with money like aws and gcloud, that also sell 'added value' services on top of the bare machines.


Isn't that the vast majority of the European hosters?


There are also EU-based hosters with larger profit margins, if that's what you're asking. Some might also have been large enough to negotiate long-term electricity contracts not subject to the recent fluctuations.

Even OVH had some solar PPA, though it's mostly reliant on nuclear power so it is subject to price swings in France. Telenor seems to have invested in a 260 MW wind power plant. https://baxtel.com/news/ovhcloud-s-solar-ppa-with-edf https://baxtel.com/news/telenor-signs-wind-ppa https://www.theregister.com/2022/08/23/ovh_inflation_price_r...




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