Price adjustments for the Open Telekom Cloud

In this article you will read about,

• why the Open Telekom Cloud is adjusting its prices,
• when the price increase will take effect,
• and what options users have to react to the adjustments.

On average, the cost of energy in November 2022 was 66 percent higher than in the same month last year – an unusually drastic development even for energy products, and one that is having a significant impact on all sectors. This is reflected in higher producer prices.

Cloud providers are particularly affected. This is because the cloud is basically a machine that converts electricity into IT resources. Like other providers, the Open Telekom Cloud will therefore have to respond to the situation on the energy market – in two ways.

"We will raise the price level across the entire portfolio by an average of 10 percent," explains Tristram Wörmann, Pricing Manager at Open Telekom Cloud. "This means we are only actually passing on part of the additional costs to our customers. The larger part is borne by us." The increases apply to both the Germany and Netherlands regions. The price level for most services from the Netherlands region will remain around 10 percent below the German level.

In addition, the Open Telekom Cloud will temporarily remove the heavily discounted 36-month reserved packages from its products and services. The changes will take effect on March 1, 2023. "We are not happy about these adjustments, but they are necessary for a cost-effective operation of the Open Telekom Cloud. Further measures as a result of the general market developments cannot be ruled out in 2023," said Pricing Manager Wörmann.

The previous conditions will remain in place until March 1: Reserved packages also for the 36-month period will continue to be available, and the prices will remain at the current level. "In this way, we want to give our customers the opportunity to plan for 2023 and beyond and set the appropriate course," says Andreas Falkner, Vice President Open Telekom Cloud. By purchasing a reserved package, customers can secure the significantly reduced prices for a longer period.

Customers who use the Open Telekom Cloud in pay-as-you-go mode can react at short notice anyway and reduce workloads on the platform or resources, for example by using cheaper virtual machines. This is a fundamental strength of the cloud. Alternatively, users of the Open Telekom Cloud can move workloads to the Netherlands region with its more favorable price level.

"Even after the price adjustments, the Open Telekom Cloud will continue to offer a very good price/performance ratio in a market comparison," says Wörmann. And that’s also because the general developments indicate that sooner or later all providers will increase prices. "We expect the price level in the entire cloud market to increase by at least 10 percent in the medium term."