OVH to hike prices, blames 'l'inflation'
Energy costs are up 40 percent and OVH isn't going to eat that without sharing some pain
French cloud company OVH has announced it will hike its prices.
A Monday post penned by founder Octave Klaba and CEO Michael Paulin claimed customers need to fork out more money because energy prices have risen 39.7 percent while the inflation rate in France hit 8.9 percent in July.
OVH has a contract to acquire electricity that expires in December 2022.
The post explains that OVH's next deal will come with a higher price.
"This is a significant increase that we must pass on to all the services directly related to the electricity consumption of our infrastructures," the post states, adding that new and existing customers will all feel the price pain.
The pair explain that price rises will commence from December 1, 2022, and will be around ten percent across bare metal, Hosted Private Cloud, Public Cloud, and web hosting services.
Details have been promised "in the coming weeks."
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Klaba and Paulin claimed that OVH customers already pay low prices thanks to previously implemented energy-saving innovations and added that the price rises don't signal a change in strategy.
Energy price rises in Europe are partly connected to Russia's illegal invasion of Ukraine, which has led Vladimir Putin's regime to crimp the supply of natural gas. As energy supply slowed, the laws of supply and demand manifested, and prices rose. Clouds aren't immune to such forces and while OVH is a big energy user, its suppliers clearly can't keep selling at the same price offered under its current contract.
OVH is unlikely to be the last cloud to be forced to raise prices, although its hyperscale rivals have often invested in renewable energy that can be cheaper than electrons sourced from fossil fuels. ®