I have been searching for something like that for a long time - a service that is cheaper than Rackspace and Linode, and no traffic fee. It's high time, if you ask me - RAM costs coppers these days. Such servers are great for testing purposes, and sandboxes for clients. But such services usually have some cons as well. Here are some pros and cons of such hostings:
- It's faster than shared hostings. MUCH faster, in some cases.
- It gives you more control over the installed server components and extensions.
- You can adjust the resources you pay for as you grow.
- You can have exclusive access, such as ssh, and install git or subversion, or anything else, as you like.
- You don't have hidden blocks, like "exceeded CPU cycles" or "exceeded number of MySQL queries", which are a scourge of shared hostings.
- You need to install and configure server yourself on top of a bare OS with ssh. (Not a problem, if you know how).
- 256MB RAM is more that 128MB that the shared hosting usually provide, right? No. Shared hosting allots you 128Mb or even 256MB (PowWeb) for PHP, allowing to specify more than that in you php.ini file. But the 256MB of a VPS means it's for the system as a whole, not just PHP, as on a shared hosting. Wait till you install your servers and extensions. For me, MySQL would not even start on a server with 256MB, for the lack of RAM on DigitalOcean. So, if you run a LAMP server, you can't go with the cheapest plan, but have to choose $10 plan (with 512MB RAM). And hence the 'uh...'
- Have you configured email and ftp servers? If you know how to configure LAMP server, but do not know how to configure email and ftp servers, you can not switch to VPS from your shared hosting completely. Google for a tutorial how to set up email server - it's not as easy as LAMP.
- No hosting panel. Yeah? Well... Using Plesk and CPanel on shared hostings is a given, but they are quite expensive, if you want to buy a license for yourself. In fact, they will often cost even more, than your VPS! You may want to use free open-source panels, like ZPanel, you will face the necessity, to install more required languages, components, and modules, that will bloat your system to the extent, where you will have little left for the server itself.
So, what gives? My decision is to use VPS for staging, for the LAMP projects, that do not need email, cpanel, and other stuff. And keep my small blog at a shared hosting.