We’ve been offering VPS for a few months now and have been paying close attention to our competitors. After doing the math several times I’m still baffled as to how people can offer 512mb ram on a VPS and sell it for $10 and make a profit.
Say the each host node has 24GB of ram, this allows for roughly 44 VPS giving the node some free ram for cache. Now 44*10 = 440, $440 is what it cost to maintain a server with 24gb ram + bandwidth, power and high performance disk. Where do you make profit at this price?
And it seems like the cheap host always say “we don’t oversell”, well how do you not oversell something like that, whats the point of running a business if you don’t make any money? A lot of the providers are offering 512MB under xen, As far as I know its a LOT harder to oversell a Xen node than it is OpenVZ.
Regardless, even if you do somehow run this server for less than 300/mo I wouldn’t consider the profit made effective once you factor in paying people to handle support tickets ect.
Keep that in mind when your shopping for a VPS, paying the least you can does not mean your getting a good deal.