1) I feel like Linode offers a level of support that the others don't offer. There are lower end providers that do offer good support, but it's not as consistently good as Linode. Were they to start offering cheaper $5 or $10 a month plans, they would be challenged when it comes to continuing to offer that level of support.
2) Observationally, it seems to me that Linode customers on average tend to be more serious about their usage than those who are looking for a <$5/month VPS. Go to the IRC channels for each company and see who hangs out there. That said, this should only matter to you if you are concerned about who your neighbours may be on a VM host, if you plan on being part of the IRC community, or if you are concerned about how reputable your IP address looks given what block it belongs to.
That said, I do think the performance of DO is quite good. It reminds me of Slicehost back in the day.
The BuyVM guys are just the best people ever, and I mostly maintain play boxes there just b/c I can get away with stuff there that might not fly at DO or Linode.
As a more established provider, Linode has to decide if adding more customers would be worth the incremental support costs. Given Linode's reputation for support, adding a bunch of LEB customers who aren't likely to renew at the same rates as people who pay more money - and are also likely to have more support requests - competing with that market doesn't make a ton of sense.
Plus, whether fair or not, having a minimum pricing point makes a service seem more premium -- more "ready for serious business." Now, obviously we've all been with expensive hosts that have terrible performance -- but you'd be surprised how many non-technical decision makers will choose a higher-priced offering over a lower-priced offering, on the supposition that "more expensive = better."
Sure you'll save some money, but you might also waste hours of your time setting up a server that could one day disappear into thin air.
As an aside, one of my friends has a 100 meg free VPS from one of the terrible free vps providers. He has managed to squeeze a Minecraft server on, and that can hold about 2 or 3 players! (apart from the terrible network, cpu and uptime)
A database server or similar wouldn't work, of course.
1GB-YEARLY
3 vCores
1GB RAM
512MB vSwap
50GB RAID10 Disk
1TB Outbound BW
1 IPv4 and 1 IPv6
OpenVZ/SolusVM
[1] http://iniz.com/[2] http://lowendbox.com/blog/iniz-yearly-deals-and-more-25year-...
1. It's 20 bucks... take a gamble!
2. The owner, Tim, has personally responded to every issue I have ever had within an hour. Pretty stellar, if you ask me.
Yes, this, the $10 plan is DO's most popular.
(Please don't say it's because the pricing page highlights the $10 plan ass "most popular". You know that's just a classic up-sell trick, right?)
How big is that market, really? I keep a small VPS around for whatever (I like Hetzner), and I'm sure lots of nerds are the same. But for any usage that's even a little bit serious, $20/month is peanuts.
A lot people don't need an entire server and just need a shell, some file space, and a small web/app server.
Even just 10 years ago it was very expensive to get a non-shared hosting account. Go back a little further than that, and you were elite if you had a real server out there somewhere. Back then a low-spec co-located server was $300 a month. And let's not even talk about how expensive bandwidth was!
I've always needed memory more than disk. Really wish I could pay some of these providers just for a one off increase of a few extra gigs of memory without tiering up which includes an entirely higher level of storage that I will not ever use.
I run a service that could get away with only 8GB of RAM, but definitely needs at least 2TB of space, plus plenty of room to grow.
WholeSaleInternet for example, currently has a Quad-Core Xeon E3 1230 for sale at $49/month with 5 IP Addresses. 1GBPS connection with 10TB bandwidth with 8GB of RAM / 250GB of Hard Drive.
If that 2TB Hard Drive is really needed, you can compromise on the CPU and go for a consumer-grade AMD Fx-4100 (Quad-Core AMD) from Datashack for $55 / month, with 5 IP Addresses, 8GB RAM / 2TB of Hard Drive space, 10TB of Bandwidth on 1Gbps
Most web applications seem to be Disk heavy or RAM Heavy... I rarely see CPU-heavy applications. So the AMD Fx-4100 can be good enough (its far far better than an Atom, although it isn't as good as a modern E3 Xeon).
I've never had the need for it, but since Dedicated Servers often come with 5 or 13 IP Addresses, and they can be as cheap as ~$60/month realistically... I think its better to just install Proxmox on a single dedicated box and spin up your own private VMs if you are honestly going to need multiple VMs.
Linode allow you to attach additional IPs to your Linode at $1/month, for example, I have one Linode which has 6 IPs attached for only $25/month. I still can't find a company has this kind of flexibility.
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23.23.23.26it's called "skin in the game", and those with very little skin in the game do not truly give a shit about their own problems, so they expect others to give a shit for them.
every business learns this lesson at some point. basically all these cheap hosting providers are trying to make money by automating the problem away - we'll see how it works in the long run for hosting. the jury is still out if you ask me.
(Just to be clear, Digital Ocean works the same way. They're charging you for the resource allocation and associated maintenance. If you choose to not actually use the allocation you're paying for, that's your business.)