I wonder if it would ever be possible to reach that value-per-dollar in the current economy.
Hetzner works because it was built a long time ago when talent was cheap, which it was because the property Ponzi wasn't at the stage where an average post-tax middle-class salary barely covers rent. Since then they've managed to stay afloat because it's only maintenance and small incremental changes from that point on.
Building such a new operation (and offering competitive prices) from scratch today would be impossible based on labor costs alone. This is presumably the same reason they don't offer their very-good-value dedicated servers in the US either, only "cloud" VPSes which are orders of magnitude more expensive.
I think the situation may not reflect cost of hands and housing. But the sunk cost of Hetzner to be in Germany, compared with the break-ground cost to construct their existing model in the rest of the world: I think that part is true. Selling off services in German hosted racks is at this point, massive profit on low price because the sunk cost has already been covered. They are sweating an asset into people like us, who want cheap disk but not the 100% reliable coverage of a contract which gives us replication, offsite, 3-2-1 class services. If they took that into the US the sunk cost component would not be covered, their sell price would be significantly less profitable.
The cost of hands and housing for hands, yea thats marginal in this.
This theory ignores the entire Midwest rust belt where the property pricing squeeze often barely exists and senior level engineers barely cross $100k for salary.
By your logic AWS should also be cheap since it was also built under similar timing.
Hetzner is cheap because they don’t provide the same level of abstractions. They also have competitors in the same price range. They aren’t wildly unique.
Dutchie here married to someone from the Midwest. Can confirm, those houses look really cheap there. It was one of the reasons why we considered living there. But the Netherlands won out over other things (e.g. healthcare).
Hetzner works because it was built a long time ago when talent was cheap, which it was because the property Ponzi wasn't at the stage where an average post-tax middle-class salary barely covers rent. Since then they've managed to stay afloat because it's only maintenance and small incremental changes from that point on.
Building such a new operation (and offering competitive prices) from scratch today would be impossible based on labor costs alone. This is presumably the same reason they don't offer their very-good-value dedicated servers in the US either, only "cloud" VPSes which are orders of magnitude more expensive.