You will need to be very good at explaining why you are better than the traditional hosted solutions. For example, for PHP stuff, my provider (OVH) is putting my website one a cluster with 1000 servers with unlimited traffic and an insane number of goodies for 2€ (yes two) per month. I can hook a managed MySQL instance (Solaris Zone) with up to 1GB of RAM for some € per month. So it starts at 2€ and up to 60€ for something which can really handle heavy load.

I would have to do it now. I would look at offering PHP hosting for a limited set of frameworks with a really good integration of the framework within the infrastructure to add really good value to the developers. Let say a fanatical support of ZF with ready to use Solr indexing, memcached etc.

How do you differentiate? What is the real added value against Plesk whatever control panel is used at the moment?

Anyway, good luck and have fun!