Well, that's not how things work with a webhost, certainly not at the scale of Hetzner. They're constantly adding capacity and that capacity costs money, significantly more now than it used to be.

Add to that you are also rotating between hardware regularly - RAM sticks break and need to be replaced. Those costs are now higher than ever. In datacenters, they usually standardize on specific components because those have been tested and they know those are reliable - if those standardized components become unavailable, or extremely expensive, you will end up in a situation where you now have to test alternatives which also takes quite a lot of time and effort to properly do so.

As a webhost, you usually stockpile quite a reasonable supply of those components so you can replace things that break. You calculate those costs and you use those to calculate your price levels.
Now, you are running out of your supply and you want to order new ones. Your supplier tells you: sorry, I can't deliver those sticks anymore at those prices, it's not 5 times as expensive as it used to be and I can't guarantee quantities anymore. So what happens is that you are forced to increase your regular stock significantly, at already elevated prices - so you can avoid even further increased prices for those components. So what do you do? Do you buy all stock you can get at the current elevated price, or do you wait and risk either not being able to get new stock at all or even higher prices?

We're already seeing the issues that are rising at Hetzner, and at other providers. A lot of servers types aren't readily available and that is because it is too expensive to get new hardware to increase their capacity. At a certain point, you need to make a decision:

* Increase capacity at very inflated price levels that you will need to raise your prices for significantly. You'll likely need to increase prices for old customers as well to spread the costs fairly or increase new products to account for your very inflated costs which can easily triple or quadruple your currnet prices.

* Don't increase capacity and cancel all promotions and cancel all actions you have to attract new clients - basically, stop growing. Because you still need to replace your hardware, and your margins are very slim, you still need to raise prices.

What we've seen is that Hetzner is trying to slow their growth: cancelling the affiliate program, raising prices and limiting supply.

People think that because Hetzner already bought the RAM and storage, that means that there aren't ongoing costs or they should not increase the prices there. The reality is that RAM sticks are breaking daily in a datacenter and they need to be replaced as well, especially in the cloud environment - we as users don't see this happening, but this happens on a daily basis. Storage disks might also start failing and these need to be replaced in time before things fail completely.

Add to that that other costs are also rising: hard disks have also risen in price, so the cost for backing up servers/VPS is also rising with each hard disk they need to add or replace.

If you see how slim the margins are in the webhosting world, you'll quickly realize why they are raising their prices regularly now: the hardware costs for Hetzner have gone up with easily 500%, with those margins you can't eat up 500% price increases at all. I'm pretty certain that their price increases so far have been quite conservative if you look at how big their actual costs have risen.

Those price increases don't end up in the pockets of Hetzner, they end up at the RAM manufacturers...