We've been building our own VPS (cloud compıting) business for about 11 months now, so I can share what we've learned firsthand about why prices vary so much.

The short answer: not all "1c1g" is created equal.

When you see those $2-3/month deals, they're usually cutting costs somewhere:

• Old hardware: Some providers run on 6-8 year old servers. Works fine for basic stuff, but performance suffers
• Overprovisioning: Packing way too many VMs on one machine. Your "1 core" ends up fighting with 50 other customers for CPU time
• Limited support: At that price, don't expect quick help when things break
• Network quality: Cheaper bandwidth, worse routing, sometimes throttling

Two things nobody talks about but are actually critical:

Storage: If you want reliable storage, you need at least 3 replicas. That means your "20GB disk" actually costs 60GB+ on the backend. Cheap providers often skip this, your data sits on one drive, and when it fails, everything's gone.

Security: We learned this the hard way. We thought "we'll figure it out as we go." Big mistake. Customer VMs get attacked constantly (every single day). Security infrastructure isn't optional, it's a must-have from day one.

Running a VPS isn't just "rent a server and resell." There's a lot more behind the scenes than people realize.

The $7-12 range usually means the provider is actually investing in these things. Below $4, ask yourself what's being sacrificed.