I've had an idea some time ago about low-end linodes. Currently, the smallest linode is 512MB priced at $19.95 a month. While that's a decent price for a very good VPS, it may be a bit high for certain people or purposes (like a basic ZNC/VPN server or a secondary DNS box for cPanel). I therefore think it would be interesting to see 128MB and 256MB linodes again at lower prices. This way linode could broaden its potential customer base and maybe even satisfy existing customers by offering more choices in node sizes. It could also increase revenue.

I see no downsides to this But, what do you guys think? It this a good idea or not?

There comes a point where it costs them more money to perform the administrative services (e.g. billing, support) than they make from the customer. Linode is damn good at what they do (I'm sure I don't need to tell you that) and a 512 is a fantastic price for what it is (not oversold, super-fast, local storage, IPv6...). Of course, I don't have the data, but I'm sure it wouldn't make much sense for them to offer even smaller Linodes for lower prices.

This comes up regularly 19.95 is as low as they'll go.

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I wouldn't mind seeing smaller packages for the exact same reason, (ZNC etc) but I agree with squircle on this one. $19.95 is pretty low for a service that isn't oversold as is.

Interestingly, the other guys just effectively deprecated their 256 MB plan. So, that might be an indication that there is more pain than one would expect. (Then again, the root kit they install does take a lot of RAM, so maybe it's a practical matter...)

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Considering RackSpace's 256MB plan with bandwidth cost more than Linode's 512MB plan, I'm not sure your point holds up.

In the new version of the Rackspace Cloud there is no longer a 256MB plan. So new customer can't choose it, only existing Rackspace customers can use the 256MB plan now.

Right, and it did then, and does now, cost more than a Linode 512 when resources are factored in.

Slicehost had competitive pricing with Linode, but the first thing that RackSpace did when they merged that in was to jack the prices way the heck up.

Rackspace have been doing that for years. They have always been ridiculously expensive.

Rackspace had competitive options during the period of after they bought out Slicehost and before they merged operations into Rackspace proper.

I'd also like to see a low-end Linode for running low traffic websites/blogs on.