Probably pretty big - look at how popular tiny VPS providers are.

A lot people don't need an entire server and just need a shell, some file space, and a small web/app server.

Even just 10 years ago it was very expensive to get a non-shared hosting account. Go back a little further than that, and you were elite if you had a real server out there somewhere. Back then a low-spec co-located server was $300 a month. And let's not even talk about how expensive bandwidth was!

What if you want to have several tiny boxes? For example, if you want to host a mail server as a separate box for security, that's another $20/month. Or what if you need to use a different Linux distro for something? Another $20/month. A few examples like that add up fast.

Containers, e.g. through Docker, are good for that kind of thing.

Not with the tiny amounts of memory offered at that price. 2GB is very easy to burn through in short order. Anything less than 8 feels really claustrophobic.

I've always needed memory more than disk. Really wish I could pay some of these providers just for a one off increase of a few extra gigs of memory without tiering up which includes an entirely higher level of storage that I will not ever use.

Some types of sites need disk more than RAM, and that market is really weird right now too.

I run a service that could get away with only 8GB of RAM, but definitely needs at least 2TB of space, plus plenty of room to grow.

When numbers start getting up into that territory, I tend to look at the discount dedicated servers.

WholeSaleInternet for example, currently has a Quad-Core Xeon E3 1230 for sale at $49/month with 5 IP Addresses. 1GBPS connection with 10TB bandwidth with 8GB of RAM / 250GB of Hard Drive.

If that 2TB Hard Drive is really needed, you can compromise on the CPU and go for a consumer-grade AMD Fx-4100 (Quad-Core AMD) from Datashack for $55 / month, with 5 IP Addresses, 8GB RAM / 2TB of Hard Drive space, 10TB of Bandwidth on 1Gbps

Most web applications seem to be Disk heavy or RAM Heavy... I rarely see CPU-heavy applications. So the AMD Fx-4100 can be good enough (its far far better than an Atom, although it isn't as good as a modern E3 Xeon).

I've never had the need for it, but since Dedicated Servers often come with 5 or 13 IP Addresses, and they can be as cheap as ~$60/month realistically... I think its better to just install Proxmox on a single dedicated box and spin up your own private VMs if you are honestly going to need multiple VMs.

Exactly, for that situation, I ended up going with an entirely overpowered dedicated server with an E5 and 32GB of RAM. I shopped around, but was very conscience of network quality, quality of support I'd get, and was still able to get away with paying about $250/mo, which is very reasonable compared to any kind of cloud offering.

Thanks for pointing that provider out to me. Those are some of the best prices i've seen this side of Hetzner.

Huh? Containers are quite lightweight; you can run several of them in 2 GB of RAM.

I was referring more to the applications within than container overhead.

Sorry, it was $5 per 90MB. Forgot to add the 90

Not if you need them to run on separate physical hosts. [e.g. A galera cluster]

And I would say the market on that need is pretty small, as originally stated, not nonexistent.

I bet its a lot bigger than you think. For example, you can handle a ton of views on something like WordPress or Ghost with DO's smallest offering. Especially if you use it in combination with caching and and a reverse proxy like Cloudflare.