How is raising prices for the same exact service better for the clients?
This just doesn't add up. Exact services don't exist unless two know-nothing vanilla installs of OpenVZ on identical hardware and network. Big big big problem with VPS is most are generic in nature and hardly anyone goes and stands out as different, so assumption is they are all same. True, most shops are generic and kind of similar. Maybe most shops are power overloading nodes
Shame on them if so.
You are inferring that lowering prices is good. (sure lowering prices is good for more customer buys / less purchase friction / rejection). The question is why do so many companies have to go lowering prices to basement levels then go lowering the numbers more? Are we to adopt this and think that 2GB VPS at $1 a month is reasonable because it's mathematically doable on latest hardware with mass oversell?
Lower prices ARE NOT better for consumers. If this was true every major hosting BIG BUSINESS would have lowered their numbers to compete with lowend priced shops. Customers would have demanded lower prices. Big hosting shops are barely lowering prices. They are MUCH higher per month often than what a lowend per YEAR is. Lots of customers just won't buy cheap because it's business unsound from support, to lack of phone support, to lack of auditing, to lack of any ABOUT US info, to just sketchy fly-by-night feeling most give.
Raising prices having sustainable prices SHOULD guarantee real business things - like actual staffed help desk working in native tongue and at acceptable knowledge level. It should pay for monitoring and proactive staffing. It might pay for actual administrator to manage systems. It should also have relationship to number of containers on a server and resource contention - this point gets foggier as hardware is more capable of masking the load and contention even during use flare ups.
Way I see it is that a server has potential. Often that potential is a mirror of the company selling such (the humans, their comforts, self worth, etc.). Yes, there are some bargain lines from diverse companies that are doing it for biz diversity or market testing or lead gen - not many though. The potential in a server is $XXX-$XXXX of monthly income.
If I run a more formal host with sustainable numbers I might get $10/GB without sales reduction on income. I can load a 64GB box 1-1 @ 64 1GB containers (ignoring load and mix use case issues) and have $640 income for 64 containers.
In contrast, the price lowering approach will park hundreds of containers in there, upping contention, upping horror pool when breakage happens pushing oh 150-1000 customers in there and often not even hitting that $640 income number, often.
You are inferring that stacking many hundreds of containers is the exact same service for clients as one loading a few dozen. It isn't. Conceptually same, sure.
These issues are why more people are moving away from VPS and distrusting in general. We dealt with similar can-do approaches with shared years ago. Difference here is VPS is access to shell and more indicators of slowness and abuse. That's why VPS customers are less clingy to brands and more likely to up and leave in a heartbeat --- plus a subset is just more technically able to do what they need (not stuck in coddled GUI wrapper).
Whole situation reminds me of the concept of dilution. Think about it in soda pop terms - as we all probably have had a glass - you order a Coke or Pepsi it arrives at your table flat and tasting barely like it should. Why? Often they are diluting the product with more water to lower their commodity cost on the syrup. A lowly cheap glass of soda that probably costs the establishment 9 cents (well use to a decade ago) and they are skimming as if their commodity price is too high. In the process of diluting, they are ruining the reputation of the commodity syrup company (Coke or Pepsi) and they are beating the customer.
Never though in said restaurants have I seen them take the $1.50-2.50 soda price and lower it to 58 cents just to sell more. I am entirely sure I've never seen such a place drop things to 58 cents then go intentionally diluting product since they have reduced profitability.
^ --- This is how I feel lots of VPS shops are operating. Banking on their customers having paid too little to complain or having spent so little on impulse buying that they aren't even using such services.
Non-active / idle customers might be good for node stretching, but they are horrendous customers. Retention rates are going to be low since they don't need or want the services. When a company has tons of that, they should revisit their business concept and customer base.
