I have been in hosting and SaaS for more than twenty years, and I cannot remember a stretch quite like the last few. Energy, hardware, licensing, software: almost everything a hosting provider depends on has gone up, and a lot of it went up fast. If you run a hosting business, you already feel this in your margins. The question is no longer whether costs are rising. It is what you do about it without wrecking the trust you have built with your customers.
I first wrote about this topic a couple of years ago. Coming back to it now, I was struck by how little the underlying story has changed, except that the numbers got bigger. So I am splitting my thinking into three parts. This first one is about what is actually driving the increases, and what has shifted since I first put pen to paper. The second part looks at whether you should pass costs on at all, and how different customers react when you do. The third is about the practical playbook: what other industries figured out, what the community is doing, and a few ideas of my own.
Let me start with the honest version of what is happening.
The forces pushing costs up
There is no single villain here. Several things are pressing on hosting margins at the same time, which is exactly what makes this hard to plan around.
Energy. Data centers are energy machines. When electricity prices spiked, colocation providers and anyone running their own iron got hit directly. The providers who handled it best were the ones who said so out loud, explained the increase, and in some cases committed to walking prices back once the market settled. That transparency mattered. Churn stayed low because customers understood the situation was not something their provider invented to pad a quarter.
Hardware and inflation. Servers, storage, and networking gear all got more expensive during the supply chain crunch, and general inflation piled on top: salaries, maintenance, everything. If you buy hardware priced in US dollars and you sell in a weaker local currency, you felt this twice. That currency exposure is still very real for a lot of European and Asia-Pacific providers.
Consolidation. The industry keeps consolidating, and scale wins in a cost fight. The big players negotiate better unit prices and have the cash to absorb a shock without touching their sticker prices. Smaller providers do not have that cushion, so they either raise prices and risk losing customers, or eat the cost and watch their margin thin out. That is not a level playing field, and pretending otherwise does not help anyone.
Software licensing. And then there is the software. This is the one that generates the most heat in the community, and I want to be direct about it.
The control panel situation, said plainly
Let me be a founder with an opinion for a moment, because I think the polite version of this story undersells it.
The control panel I started with in hosting, and I still love to use is cPanel (But I did switch most personal projects to an Enhance cluster since a few years ago. They switched to per-account pricing back in 2019, right after it, Plesk, and WHMCS were pulled together under the WebPros umbrella following private equity acquisition. Since then, prices have gone up nearly every single year. This is no longer a surprise to anyone in the industry. Some hosting people now call the annual cPanel announcement the “Black Week” of the control panel world, a yearly ritual where you recalculate whether your plans are still profitable.
The scale of it is genuinely striking. One hosting company president described cPanel’s increases as “rampant,” noting that compared to 2019, prices in most cases have gone up over 300%. That is not an inflation adjustment, that is a different pricing philosophy. To be fair, the original shift had real logic behind it. Servers got a lot more powerful, one box could hold far more accounts than before, and a flat per-server license stopped reflecting the value being delivered. Moving to a per-account model was a defensible call. Where I would have done things differently is the communication, the way the changes landed and got announced over the years. But I assume we all learn over time. 🙂
For 2026 the pattern continued. cPanel’s plans are going up between two and seven dollars for most tiers, with the Pro tier jumping nearly five dollars, plus a new fee of $0.49 per account for servers running more than 100 accounts. Plesk is on the same trajectory, with an average increase of roughly 26% across all editions from January 2026, explicitly following the path its sister product set earlier in the year. And this is not a one-off. Plesk raised prices in 2025 as well, part of what has become a reliable annual cycle since the WebPros brands came under private-equity ownership.
Here is where I will be fair, because I run a software business myself and I know what it costs to keep one alive. WebPros does invest in the product. The 2026 releases include real work: AI website generation in the builder, an AI support agent to cut support load, better migration tooling, security and compliance updates for things like NIS2 and the European Accessibility Act, and support for newer operating systems. That is not nothing. Building and securing software that thousands of hosts depend on is expensive, and a company is entitled to charge for the value it delivers.
But value investment and pricing power are two different things, and the second one deserves an honest look. When a single owner holds cPanel, Plesk, and WHMCS at the same time, the competitive pressure that would normally keep pricing in check is largely absent. That is not a moral judgment, it is just how markets work: without a credible alternative, prices tend to track what customers will bear rather than what the product costs to run. The hard part for hosts is that switching a control panel is genuinely painful, and everyone in the value chain knows it. That is the real dynamic to plan around, whatever you think of the company behind it.
And people are, slowly, deciding the switch is worth it. Competitors like DirectAdmin and Enhance have reported more migration interest from providers looking for predictable long-term licensing. New players like AdminBolt have arrived, built specifically for hosts tired of per-account pricing. Some hosts went further and built their own panels rather than stay exposed. ScalaHosting, for example, saw where this was heading years ago and now moves a meaningful slice of its cPanel base onto its own panel every month.
It is not just the control panels
The same story is playing out across the stack, which is why this feels relentless rather than the fault of any one vendor. When I first wrote about this I listed a long roster of vendors that had raised prices: Cloudflare, AWS, DigitalOcean, Linode, WHMCS, Plesk, Microsoft on the Windows and SQL side, Veeam and Acronis on backup, and more. Most of those trends simply continued.
The one that changed the most since I first wrote is VMware. Broadcom’s acquisition did not just raise prices, it changed the entire model. Perpetual licenses were eliminated in favor of subscription-only, and the minimum went from 16 cores to 72 cores per purchase. For a provider running small or edge servers, that minimum is brutal. An organization with a single-processor eight-core server now has to license 72 cores, paying for 64 cores it will never use. Reported increases run from around 150% on average to, in extreme cases, many multiples of the old cost. Broadcom also cut the number of authorized VMware cloud service providers from over 4,500 globally to roughly 13 by mid-2025. If you built your business on VMware, this was not a price increase. It was a reset.
The pattern behind all of this is worth naming. A lot of the tools hosting providers depend on have been bought up by private equity and venture capital, then run for margin. That is a legitimate way to run a business. But it does mean the tools you built your company around may not stay affordable, and that risk now belongs to you whether you like it or not.
So where does that leave you
If you are reading this with a knot in your stomach, I understand. But I do not want you to walk away from part one feeling like the game is rigged and there is nothing to do. There is plenty to do. Costs going up does not automatically mean your reputation or your business is in trouble. Plenty of providers have navigated this and come out stronger, more focused, and less dependent on any single vendor.
The real question is the one I will spend the next two parts on: when the costs land on your desk, how much do you pass on, to whom, and how do you do it without losing the customers who made your business worth running in the first place.
That is where part two picks up.
Next in the series: whether to pass costs on, and how your customers actually react when you do.
