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Comment by shay_ker | Hacker News Reader

How does Hetzner manage to be so much cheaper than AWS & GCP? Are the other cloud providers just making THAT much margin, or does Hetzner have a special angle?

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We get asked this question a lot, so we wrote up an explanation: https://docs.hetzner.com/robot/general/pricing/hetzner-prici... --Katie

> We try not to cross subsidize our products or services.

Could you then at least start offering object storage on top of your regular storage offerings in the cloud? You have repeatedly stated you won't do this, but I don't understand why. I think people using your services would pay a premium for an AWS compatible storage API.

There are actually hints they're working on S3-compatible object storage:

https://www.reddit.com/r/hetzner/comments/14e8asj/object_sto...

If/when we are able to provide object storage in the future, we will announce it on our social media channels, our customer forum, and our customer newsletter. We are also always very grateful to anyone who posts our good news here on HN. --Katie

IIRC, they produce their own hardware (including using consumer-grade components, if I'm not mistaken) and optimize every bit for efficiency. Managed services also come with an extra fee. From my experience, they're also more selective about clients.

They're also based in Germany, so they don't have to pay the hyper-inflated SV salaries and probably don't overhire, but I'm only speculating here.

Don’t AWS and GCP also produce some of their own chips and hardware?

But basically you’re saying, yes, AWS and GCP are making just as much, maybe more, margin as Hetzner?

AWS, Azure and GCP have much higher margins than Hetzner. So while I use these services when working for my employers because they pay me to do so, when I spend my own money on my startup I use Hetzner exclusively.

Consumer-grade is too expensive. Best price/performance with high utilization is Epyc 9654 based system. We build at roughly $7k/box for 96 cores, 768 GB RAM, 8 TiB of NVMe. You can't buy that yourself, though. You have to go through an integrator. We built our own because near 100% utilization on HFT sims and training.

One thing that I like about working at Hetzner is that it is privately owned, so we don't have a bunch of investors expecting an ever-increasing return on their investments. We can re-invest profits in the company itself, in our infrastructure, and in our crew. --Katie

I have an impression that EC2 instances are priced so high to discourage their use and instead steer customers to managed services: S3, CludFront, Lamda, RDS, SQS, Fargate e. t. c.

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