I’ve noticed for the past year or so web hosting prices seem to have stagnated. This after prices plummeted from around 2001 through 2003. That steep drop presumably was largely an effect of the bust, but I’ve come to expect continually dropping prices for computer-related products over any period longer than say a quarter.
Some evidence from a couple low end hosting companies I’ve used:
ServerMatrix “SuperResellerz” dual Xeon, 1G RAM, 2x200G disk, 1.5T/month bandwidth: $299/month in October, 2004 (archive.org), $299/month currently.The only differences appear to be they used to offer steeper monthly discounts for larger setup fees and the Xeon CPUs have gone from 2.4GHz to 2.8GHz. (They also now offer Debian, which I believe is a very recent addition, but irrelevant for pricing.)
So why haven’t prices eroded in the past year or so? Accoring to Network World hosting prices aren’t just stagnant, rather they’re soaring, with waiting lists for data center space in some cities. The only reason given:
This call for floor space and services at carrier data centers and the accompanying price increases are being driven by corporate efforts to improve disaster recovery and regulatory compliance.
That sounds more realistic than the only demand-side pressure I’d thought of, half-seriously: “Web 2.0” application deployment and an apparently coincident belief that pure hardware scaling is the way to go.