When someone says “bare metal” to me, it implies that virtualization is a problem for their workloads. I’d be very surprised if there was a mass increase in workloads that was the case for. I’d be surprised if most of Hetzners existing non-virtualization customers even care.

When someone says “on premise” I assume they mean they are running some part of the premise. Whether they are leasing rack space in a broader data center or not, I agree that it’s a continuum, but I’d expect on premise to include negotiating energy and network as part.

To me, the more interesting question for this conversation is a)how are you paying for compute, are you doing long term lease/purchase of servers or are you getting short term provisioning of a standard sku and b) are you using “value added” services. Are you provisioning your own data warehouses, specialized database clusters etc, or are you using a managed service?

The distinction between a vm on a hyper scalar and per hour provisioning of hetzner compute (virtualized or not) seems pretty straightforward and I’d be shocked if there was some mass migration of those workloads away from the big clouds.

I have done workloads where virtualization very much matters and the physical locality of the servers makes a big difference and we are seeing the opposite happen, the cloud providers are dipping their toe in that market which has been closed to them.