OVHcloud chief issues customer price warning amid surging hardware costs

OVHcloud CEO Octave Klaba has urged customers to brace themselves for potential price hikes as cloud providers continue battling surging hardware costs.

In a social media post on 10 August, Klaba noted that the "significant impact" of RAM and storage costs could mean cloud prices rise by as much as 87%.

Klaba has previously warned that price rises were incoming due to rising component costs, but at the time estimated cost increases in the range of 5-10%.

"It is very frustrating to raise prices for a company like OVHcloud, because we make tremendous efforts to be as competitive as possible on pricing," Klaba said, in a statement translated from French by X.

"But the global context imposes very strict discipline on us to, quite simply, continue delivering new orders. Indeed, the real risk is not being able to fulfill your orders and making your expansions overly complex."

OVHcloud isn't the first company to react to the market this way. Back in March, Chinese giants Alibaba and Tencent increased cloud prices in response to surging hardware costs.

In February, German cloud leader Hetzner raised prices by 50% on some products. In June, AWS boosted the price of one key AI cloud service, EC2 Capacity Blocks for Machine Learning.

Rising prices at OVHcloud

Klaba said OVHcloud was struggling to limit unit price increases, noting that the company's prices were shifting from three times cheaper than rivals to just two times.

"In July and August, we received the latest details on RAM and disk prices for T3/Q3 2026, which now allows us to finalize the price impacts for new Public Cloud and bare metal orders, as well as for a recent portion of equipment already in production based on the latest generation of DDR5 RAM," Klaba said.

"The exercise remains a tightrope walk: we need to place the right volume of orders, month by month, over 12 months, with no guarantee on purchase prices and no way of knowing what our customers' real demand will be," he added in the translated post.

The price rises will start on new orders from the beginning of September, and equipment already in production from October.

Older generation systems, dating to 2024, will see smaller or no increases. Equipment from this year, meanwhile, will see an 87% price increase for the Game setup, 49% for "Advance" users, 40% for "Scale" users, and up to 59% for those under "High Grade" plans.

"That's +28 % on average for Gen 2024, and +51 % for Gen 2026," Klaba noted.

For public cloud, prices won't be changing directly, though there will be alterations to how companies are billed, which could boost costs by up to 22%, Klaba said.

The CEO added that he expected RAM and storage prices to continue to drive up cloud prices in 2027 and 2028, with a "return to normal hoped for in 2029."

The memory crisis continues

The memory crisis has rocked a host of industries over the last 12 months, with consumers and enterprises alike facing steep price hikes.

As ITPro reported earlier this year, budget devices are among the worst hit by the price surge, with device manufacturers switching their focus toward high-end premium devices.

PC shipments have fallen for the first time in more than two years, according to research from IDC. Analysis from the consultancy found global PC shipments slid 4.9% on year in the second quarter of this year to 68.2 million units, down from 71.7m in the same quarter last year.

That isn’t slowing down provider profits, however. IDC noted that PC makers have reported revenue growth, highlighting that the cost of the crisis is being passed onto consumers and businesses.

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