There's obviously a market for hosted services, from barebones shared hosting services like GoDaddy to VPS hosting like Linode and dedicated hosting. There's a

There's obviously a market for hosted services, from barebones shared hosting services like GoDaddy to VPS hosting like Linode and dedicated hosting. There's also a market for specialized hosting like point-and click design with Squarespace and Ruby on Rails hosting with Heroku (which recently sold for >$200 million to Salesforce I might add). My advice? Run with the idea. The barrier to entry is stupendously low. Resell a VPS or even EC2 or even get your own dedicated server. If it doesn't work out, no loss. If it does, it's relatively easy to scale up to more cost effective solutions. You may want to make your preview sites not usable as free hosting however. Throttling requests, putting a banner at the top, limiting requests, something like that.