If everyone is being hit by the same cost issues, small VPS hosts just need to charge more to operate the same. Most small VPS hosts are dirt cheap and I don't think many people would be shocked if prices go up in this environment.
I doubt that.
Some dirt-cheap VPS maybe too unreliable to run anything serious, that's why they sell that for dirt cheap. And their consumers generally won't complain about sudden server reboots, because that's what expected for the price.
If they increase their prices, then many of their customers maybe better off just use Linode or DigitalOcean etc instead, as these vendors provides better guaranty on stability.
I’m just making a market assumption that DO needs to raise their prices as well. Everyone needs RAM.
Not sure what the lift might be, but in theory everything should be relatively similar in future state, just more expensive. This is basically a form of inflation.
Not sure about that too, the market is just too delicate at current moment.
People renting VPS to do something, running a service, a website, email etc. But there are other ways to achieve the same without the need of a VPS.
If VPS cost increase to a certain level, some people will just host the service on their own Raspberry Pis through Cloudflare Tunnel, or just simply shut the service down.
Sure, the market may shrink some but it's also relative to alternatives that are also increasing. There's no advice in the article the market is shrinking or that pricing is causing it to. People leaving the market on this type of cost will likely be people that have VPS's as idle resources, like some forgotten subscription they don't use but never canceled because it's <$10 per year. If that goes up to $20 per year maybe it triggers them to cancel it. It's so low cost I know this is a portion of their profit from customers like this, but it's just a business problem to solve and shouldn't kill any provider on it's own.
The comparison to 2000s telcom market does not seem similar at all to me.
$10 per year is extremely rare. $5 per month is common, and if it goes up to $10, a lot of people will still keep it if they're using it.
The provider is still making the same money for the same cost on that pre–existing service, so they might not even choose to raise the price for old customers. They're only losing an opportunity cost, and different businesses weight that differently.
Correct, I agree and meant to say per month. I believe I saw $3.5/month as smallest offering on the original author’s website
I used to run a small shared hosting business in early 2000s and I’d never raise prices on low consumption users, was never worth the risk of them canceling their subscription
Yes, even if prices would triple, VPSs would still be an attractive offering.