There are still some linodes grandfathered in with those bonuses, though.

Yup; I have one

_________________
Rgds
Stephen
(Linux user since kernel version 0.11)

Do what I do host websites for people while obtaining the use of the server for yourself also.
Linode has many bills to pay I've got a linode 720 which just barely trims the bills they need to pay.

Linode doesn't need to apologize for not offering a lower price point, and I don't need to apologize for wanting one. Linode's awesome, but it's not necessary for our respective interests to be in perfect alignment at all times.

There's cheaper VPSes out there. I'm using one for backup MX, as that runs fine on a fraction of the resources of the smallest Linode. But they don't let you do disk image management, or run recent kernels, you can't even do in-place upgrades to a recent Ubuntu, and they sure don't do DNS hosting for free. It's really pretty ass. Competition like that isn't going to motivate Linode to change.

fwiw (nothing probably), I am an existing linode customer and I would also be interested. Currently looking to "give" money to a competitor for a cheaper vps in addition to the current linode offering which I am keeping.

I would hugely prefer to buy something extra from linode but not willing to pay for a whole new 360 just for the purpose of this.

The idea of reducing overhead and risk on a potential 180 service by having it as only available to existing customers as a second VPS is actually starting to sound attractive. As was previously mentioned, removes the credit card fees causing significant overhead, removes the risk of catering to the wrong kind of crowd (super low end), reduces tech support overhead, etc.

I was thinking of it as a backup server to handle critical functions. A backup MX, either primary host of our staff mailing lists or some sort of backup for that, and a failover target that could host a slightly reduced functionality version of various services. We're on a 540 and comfortable, but if we just turned off the most demanding services (Spam assassin, our perl-based reg system, etc), we could get a lot of our stuff running on a 180 to keep up appearances. Main website, forums, etc.

Credit card fees would still be a problem if your larger nodes are on annual billing and your 180 is not.

Personally, I don't see a business case (either for Linode or the user) for such a small/cheap VPS.

As it's been pointed out, the technical, management, and billing overhead most likely makes it a money loser for Linode (which is bad for all of us).

And for the end user, who has such a fragile business model (or project budget) that a $10/month service is ok, but a $20/month service breaks the bank. How "mission critical" can it be if you can't afford $20/month?

I could afford a dedicated colo box, I use a VPS to save money. I don't stop wanting to save money though.

I get that there's support/payment processing costs that aren't proportional to the hardware, and I get that people would overload the things if Linode made them too small. But that's a reason not to do it now, not to never do it.

I can do my backup MX in 64 mb of memory just fine, a basic LAMP needs more like ~256 mb. I think that's a pretty good reason not to drop below that. But, over time the prices for that will start to fall. I don't expect that to happen for the next year or two, but I think that's where it's headed.

First, I fully respect Linode decision not to support cheaper nodes. I can very well understand that there exists a certain level of quality they want to retain which would be impossible and not viable for $10 / mo. My experience with cheap (ten bucks range) VPS is only bad. Incomplete images, lousy support, lousy performance, etc... Then again, if ten-buck-nodes would be offered as additional resource to users with existing nodes, that might be different.

To put some oil on fire, though, I wonder how a certain competitor whose name has something to do with clouds and racks, does it.

They offer hourly billing, and from talking to their sales department, I gather they would really charge just what you spent, even if it is a buck or less. I have no idea what the quality of service is there, haven't tried it myself. I also have no idea how does that work with CC company charges and minimum fees.

But I considered purchasing a stronger VM for gentoo, compile all the stuff I need for my new laptop, slurp the binaries and close the VM, all for a few hours and few bucks worth of business.

Linode will do that too...

Note: Linode prorates to the day, not the hour. That's certainly good enough for most uses, but...

Edit: Also, when you create a Linode, you get charged for the rest of the month and then get a credit back to your account when you cancel. The Certain Competitor just charges you once a month for what you've used.

True, true, but for that I'd have to shell out a few hundred $$ for the biggest node, then get the remainder of 29 or so unused days back through subsequent billings.

To be fair, though, the two business models are not competing. Each has its purpose, I guess. You won't need hourly billing if you plan to provision a server that should run for months, years. And if you compare prices on the monthly level, Linode is cheaper.

The only problem I see there is that shut-down but not deleted VM is considered active, and billed for each hour it exists, so I find it difficult to justify any activity, other than the rare one-time computing demands (and spamming, and crypto cracking, ...), that would benefit from hourly billing.

The problem with restricting it to existing customers is that there's a good chance they wouldn't sell enough for it to be worth doing. If it's not something they can ramp way up and sell thousands of, they'll probably make more money just selling more of what they've already got.

With the poor quality of cheaper VPS providers, I think it'll take someone like Slicehost offering a cheaper plan to get Linode's attention. At the moment not only do they not do that, Linode's specs at the existing price points are quite a ways ahead.

Happy new year everyone!