Not using Server Grade Hardware. Although one could argue Server Grade Hardware are not worth the premium, that is up to its customer to decide i.e Ryzen vs EPYC. ECC Memory, Server Grade SSD, Power Supply, etc. If you look at their dedicated they aren't really super cheap, there are plenty of other dedicated server out there that goes for similar pricing. The difference is that those companies only offer dedicated options and dont provide the range of VPS OVH and Hetzner offers.
Custom Hardware, down to the DC design, rack, water cooling and economy of scale. There are reasons why some Datacenter are more expensive than others. And the fire at previous OVH DC shows why. Although I remember OVH did explain they dont use that design anywhere else. Doing Custom hardware part like water cooling with Racks isn't the rocket science part, doing it great while doing it at cost efficiency is the most difficult part.
Network quality. OVH owns its own Network. Layering Cables across its own DC along with other exchanges. It used to be slower but this has become less of an issue in 2025. But in the old days the difference between premium network connected and other commodity partners from DC makes a lot of difference. ( It still does but less of an concern )
Minimal Support - Although that is not a concern anymore in 2025 because everyone got used to Cloud computing that has zero support most of the time.
Expectation of Low Margin. I think both Hetzer and OVH have accepted the fact they are in computing commodity business with low margin and aim for volume. While most US business will always try to improve their margin and venture into SaaS or other managed services. Which means both Hetzer and OVH are also the expert in squeezing penny out of everything. As someone who used to work in commodity business I have a lot of respect for these people as they are harder than most people think.
Again, these are things on top of my head when I was keeping an eye on VPS. I just checked LowEndBox ( https://lowendbox.com ) is still alive and well after almost 20 years! Before cloud computing was a thing or went mainstream there were plenty of low cost low end VPS options like OVH and Hetzner. So this isn't exactly new, they just happened to have grown into current size.
On the hardware side of things not using server grade stuff really isn't as big of a deal these days. I'd happily take a decent Ryzen 5 or 7 series over a "new" Xeon that has twice the power consumption and mysteriously the same specs as an older Xeon made a decade ago.
Even ECC - for 99% of applications (and especially on low-end VPS servers) its less likely to be a problem.
The only thing I have found to be an issue with Hetzner is on dedicated servers, and specifically the hard drives. I've had new servers provisioned and they've given me decade old drives that are on the verge of failure - it's less of an issue now as most of their servers are shipping with new nvme drives but I dare say in 3-4 years time it'll be a problem when they reuse those and have instant non-recoverable failures for some of the hardware range.
Agree it is definitely less of an issue. It also used be Xeon and EPYC ( or Opteron ) exclusive for higher core count. But Desktop CPU has caught up and now offer up to 32 vCPU for $600.
Although in 2025 AMD decided instead of people using Ryzen for server they launched EPYC Grado instead. Which is similar if not slightly cheaper than Ryzen at 32 vCPU and offer official ECC Memory support.
I had similar issues, raid 1 on two hdd and the server would randomly reboot and be slow because it was resyncing the raid. Have to pay extra to get new refurbished drives.
It’s great for throwaway machines, e.g. CI. But don’t rely on them
In Hetzner's defence, it happened twice on RAID 1 setups on one of our servers, and after dropping a ticket basically saying "look, this is the second time, can you give us a drive that isn't a dinosaur please" they did put a brand new one in.
These days I'd take their ampere VPS servers over the dedicated ones though, the performance and reliability is way better (mostly just due to it being brand new hardware).
> Ryzen vs EPYC.
If you're just looking for the name, AMD sells EPYC branded AM4/AM5 cpus that have remarkably similar specs to the Ryzen AM4/AM5 chips.
Depending on what you're doing, consumer hardware is often more than enough. And it's managed hosting... if the (whatever) dies, you just yell at the host and get new hardware, no big deal if you're doing reasonable backups.
It's kinda ironic. Back in the days people would advocate for server grade hardware because it's more reliable. Then cloud and Kubernetes came and you were supposed be able to handle failures, and treat servers/pods as cattle, not pets. But major cloud providers are still using server grade hardware, and passing on the costs to customers?
And in my experience EC2 is not that reliable. I have Hetzner dedicated servers with more uptime than EC2 nodes.