Cloud infrastructure costs are increasing across Europe in 2026. As this trend continues to climb, organizations are seeing the need for budget adjustments, and that means providing a rationale to obtain approval for any extra spend. To help with this, we’ve provided an overview of what’s changed in the market to cause these increases, how to identify why it’s happening, and how to find a solution.
In this blog post, we cover:
- Why infrastructure prices are rising
- What to do about rising server and cloud prices
Why infrastructure prices are rising
We’re hearing more frequently that customers are questioning why their hosting bill is higher in 2026, and, to put it plainly, it comes down to parts. Standard servers, such as DRAM and NAND flash, use chips. However, these have become scarce and expensive due to manufacturer prioritization.
As AI development continues to be a focus, the pressure is on memory and storage chip production needed for AI hardware. Because of this, costs across the entire server supply chain have increased.
Major hardware manufacturers have been hit by an industry-wide shortage of memory and storage chips, thanks to a rocketing demand for AI infrastructure. Following price hike reports of 15-20% in late 2025 and early 2026, those increases have now reached cloud and hosting providers.
An investigation by HostKey reports that this pressure may last until at least mid-2027 for the GPU-based server market, and perhaps early 2027 for CPU server and VPS markets.
Dedicated server prices are increasing
There are two key pressures causing price increases for dedicated servers in 2026, resulting in combined financial consequences:
Hardware costs
Price increases could hit 15-35% by the end of 2026 with some European dedicated server providers. The cost of hardware from OEMs is a driving factor, thanks to the scarcity of parts such as memory and storage chips.
The window for proceeding with a quote from suppliers is also shortening. Earlier this year, Dell COO and Vice Chairman Jeff Clarke commented in response to the industry-wide microchip shortages that their quotes are valid for the shortest period they’ve ever been.
Suppliers showing a reluctancy to lock in quotes for an extended period indicates an expectancy for hardware costs to continue to climb.
Subscription bundles
With some providers moving to mandatory subscription bundles, this is also having an impact on rising costs.
Teams running virtualized software have seen renewal costs increase by as much as 1,200% with some providers, along with minimum license and minimum purchase requirements.
With the virtualized software industry seeing a shift from perpetual licensing to a subscription-based model, this is where some pricing challenges have arisen. Businesses lose the benefits of long-term cost control, and what could have previously been recorded as a capital investment is now being seen as an operational expense when it comes to budgeting.
VPS hosting is getting more expensive
European VPS are also being impacted, with prices rising as much as 49% since early 2026.
Looking at the different tiers of VPS in Europe, the variety of budget options is shrinking, which is seen to be a permanent structural shift rather than simply a temporary hike due to supply and demand.
Those relying on the lower costs of budget options are likely to be hit the hardest by this one. It might be one for developers, early-stage startups, and small businesses to watch out for.
Pricing for Backup, Object Storage, Domains Are Also Changing
There are three final components that have seen a change worth highlighting, as they may also contribute to your budget changes.
Backup
Vendors continue to increase prices for backup solutions for MSPs, with some now doing so on an annual basis. One raised prices consecutively in January 2025 and again in January 2026, so we might see this trend continue in 2027.
Object storage
Previously, it was typical for object storage to be billed per GB/month stored. However, providers have also been introducing per-request fees on top of storage costs.
Domains
Renewal prices for .com domains are expected to have annual increases through 2030. Operated by Verisign, the wholesale .com price has been announced to go up by 7% on November 1, 2026. Registrars will then decide whether to increase prices to be at-cost or even higher for their own margins. Although unavoidable, at least we know it’s coming and can plan accordingly.
What to do about rising server and cloud prices
There are a few steps you can take to help secure more competitive pricing for your needs. Here are some infrastructure cost reduction strategies to consider in 2026 and beyond:
- Where the workload allows, extend your server lifecycle rather than refreshing hardware at current prices.
- Consider fixed-term contracts. Leaseweb cannot promise prices will never change, but any contract signed today locks in the conditions for its full duration.
- Check domain renewal dates and renew .com domains before prices increase later this year.
Leaseweb Summer Sale
Leaseweb is running a Summer Sale until the end of July with discounts across dedicated servers, VPS, backup, object storage, and web hosting. Conditions are locked for the duration of any contract signed now, offering some predictability in a volatile market.