Is the RAM shortage killing small VPS hosts?

Original Article ↗ Hacker News Discussion ↗

Impact of RAM shortage on small VPS hosts

  • Many expect low-end providers to survive by keeping older hardware in service longer (DDR3/DDR4, older Xeons), similar to how they survived IPv4 exhaustion.
  • Some small providers and would‑be entrants report the economics no longer work: RAM cost has increased ~4x, killing new deployments and even causing shutdowns or stalled startups.
  • Shortage mainly hurts new builds and expansion; incumbents that bought pre‑AI‑boom hardware are shielded.

Pricing, oversubscription, and business models

  • Consensus: even 2–3× VPS price increases would still leave them attractive, though “dirt cheap / hobby” usage would shrink.
  • Many cheap hosts overcommit CPU/RAM heavily; customers trade occasional “steal” or instability for much lower prices. Opinions differ on how tolerable this is.
  • Electricity and power density are now a significant cost for dense, modern servers; older, low‑cost hardware plus oversubscription remains viable for low‑end offers.

Why small VPS hosts versus big cloud

  • Repeated themes:
    • Far lower and more predictable prices (often 10–100× cheaper for simple VMs and bandwidth).
    • Simplicity versus “labyrinthine” AWS/Azure/GCP UIs, features, and billing.
    • Data sovereignty (non‑US jurisdiction), dislike of tech giants’ power, and desire to avoid lock‑in.
    • Easier human support: small operations where “support = sysadmin.”
  • For purely “a Linux box on the internet,” people view large clouds as grotesquely overpriced.

IPv4/IPv6 strategies

  • New providers struggle with IPv4 lease costs; some experiment with IPv6‑only VPSes or IPv4 fronted by shared load balancers/NAT.
  • IPv6‑only still has major friction (notably GitHub), though end‑user IPv6 connectivity is improving in many countries.
  • Providers are wary of shared IPv4 LB/NAT because of liability, abuse handling, and logging requirements.

RAM market dynamics and China

  • Strong debate about whether RAM is “cheaper than 10 years ago”; several commenters show current DDR4/DDR5 prices rival or exceed 2015–2016 levels while software needs more RAM.
  • AI demand is seen as the primary driver; some call the situation a bubble whose aftermath may eventually normalize prices.
  • Many hope Chinese DRAM vendors (e.g., CXMT) will fill consumer/low‑end gaps with older‑node RAM, but others doubt they can scale enough or bypass export controls to materially impact global prices soon.

Software bloat and ultra‑small VMs

  • Some argue the real problem is bloated software: modern Linux distros and tooling struggle to idle under 512 MB; 128 MB VPSes are now rare.
  • Requests for “8 MB VMs” prompt pushback that modern full Linux stacks simply don’t fit; containers or specialized minimal distros can go lower, but mainstream VPS offerings standardize on ≥512 MB–1 GB.

Trust, reliability, and role of tiny providers

  • One camp claims “small VPS hosts shouldn’t exist” due to limited redundancy, potential operator malfeasance, and weak security posture.
  • Others counter that distrust of hyperscalers, commodity nature of hosting, and the ease of switching makes reputable small hosts a reasonable and often preferable choice.
  • Overall sentiment: RAM costs squeeze margins and expansion, especially at the very low end, but are unlikely to “kill” the sector; they will push consolidation, higher prices, and more reliance on older hardware.