Hetzner vs Microsoft Azure

Hetzner and Microsoft Azure represent two very different infrastructure philosophies. Azure is the second largest cloud provider globally, deeply integrated with the Microsoft ecosystem and offering hundreds of managed services. Hetzner is a focused German infrastructure provider offering compute and storage at aggressive price points. The comparison between them highlights fundamental trade-offs between ecosystem breadth and cost efficiency.

Microsoft Azure's primary strength is its integration with the broader Microsoft ecosystem. For organizations already invested in Microsoft 365, Active Directory, Windows Server, and SQL Server, Azure provides seamless connectivity. Azure Active Directory (Entra ID) unifies identity management across cloud and on-premises resources. Hybrid cloud scenarios, where workloads span on-premises data centers and cloud infrastructure, are a core Azure competency through services like Azure Arc and Azure Stack.

Azure's managed services portfolio is extensive. Azure Kubernetes Service (AKS) provides managed Kubernetes with integrated monitoring through Azure Monitor, Azure SQL Database offers managed relational databases, and Azure Functions provides serverless compute. Azure DevOps and GitHub (owned by Microsoft) create a complete CI/CD pipeline. For enterprise customers, Azure's compliance certifications span over 100 standards, including industry-specific certifications for healthcare, finance, and government.

Hetzner's value proposition is fundamentally different. Rather than competing on breadth of services, Hetzner delivers exceptional compute performance at prices that are typically 4 to 10 times lower than Azure for equivalent resources. A Hetzner Cloud server with 8 vCPUs and 32 GB RAM costs a fraction of what an Azure Standard_D8s_v5 instance costs monthly. For dedicated servers, a Hetzner machine with an AMD EPYC processor, 128 GB RAM, and multiple NVMe drives costs less per month than a single mid-range Azure VM.

Azure's pricing model is notoriously complex. Beyond base compute costs, charges for data egress, managed disks, IP addresses, load balancers, and various service tiers add up quickly. Azure Reserved Instances (1 or 3-year commitments) provide significant discounts, and Azure Hybrid Benefit allows organizations with existing Windows Server and SQL Server licenses to reduce costs. Even with these optimizations, Hetzner maintains a substantial price advantage for raw infrastructure.

For Kubernetes workloads, AKS provides a managed control plane at no additional cost (you pay only for worker node VMs), with tight integration into Azure's networking, storage, and monitoring services. On Hetzner, Kubernetes is self-managed using tools like kubeadm or k3s, with the Hetzner Cloud Controller Manager handling load balancer provisioning and the CSI driver managing persistent storage. The operational overhead is higher, but the infrastructure cost savings are dramatic.

Data sovereignty is a significant differentiator. Hetzner operates data centers in Germany, Finland, and the United States. Its German and Finnish locations fall under German and Finnish law respectively, and Hetzner as a German company is not subject to US extraterritorial legislation for data stored in those facilities. Azure operates multiple European regions, but as a US company, Microsoft is subject to the CLOUD Act. While Microsoft has been vocal about protecting customer data and has challenged government data requests in court, the legal framework creates uncertainty for organizations with strict data sovereignty requirements. Organizations should be aware that Hetzner also operates a US location for workloads where European residency is not required. In a landscape where a few platform giants shape the terms under which most businesses operate their IT, maintaining infrastructure independence through regional providers is a meaningful form of organizational self-determination.

Network connectivity and global presence favor Azure. With over 60 regions worldwide across more than 140 countries, Azure can place workloads close to users on every continent. Microsoft's global backbone network provides low-latency interconnection between regions. Hetzner's geographic reach is limited to Central Europe and the Nordics, with data centers in Germany, Finland, and the United States (Ashburn, Virginia), making it best suited for European-focused applications, though the US presence has expanded its appeal for transatlantic workloads.

Enterprise support and SLAs also differ markedly. Azure offers tiered support plans with guaranteed response times and dedicated technical account managers for enterprise customers. Hetzner provides competent support but without the white-glove service that large enterprises often require.

The right choice depends on your priorities. Organizations deeply invested in the Microsoft ecosystem, requiring global reach, enterprise support, and a broad managed services portfolio will find Azure compelling despite its higher costs. Organizations focused on European operations that prioritize cost efficiency, data sovereignty, and have the technical capability to manage their own infrastructure will find Hetzner delivers outstanding value. As with other hyperscaler comparisons, a hybrid approach is viable: using Hetzner for compute-heavy workloads while leveraging Azure for specific managed services or Microsoft-integrated workloads.

IaaS, Hetzner, AWS, Azure, GCP, K8s