@Kurt - Thanks :)

@Jeffro - in the bottom half of the market, we probably aren't driving anywhere anytime soon, the market has standardized upon WordPress on cheap hosting on massively shared, under-provisioned servers, with a low upfront cost but a considerable ongoing cost in terms of maintenance and attempts to optimize performance when what is really needed is a more generous sliver of CPU.

If you can get a basic site up and running for $5 or $10 per month, the vast majority of people aren't going to bother looking for alternatives. The dirty secret is that most people in our industry financially depend upon the hours they can bill for all the later maintenance and emergency fixes. Personally, I find the whole thing dispiriting and have spent this year winding down my business and transitioning my remaining obligations to other providers.

The current popularity of the "premium" WordPress hosting niche is almost entirely a knee-jerk reaction to how badly people have been burnt by cheap hosting, but the major premium services are not that much better (I have come across some astonishing situations in the course of my work); we are in an age of marketing above all else, at some point a decent service might manage to slash its way through the jungle of affiliate links and astroturf articles, but I doubt it.

Eventually, the entire phenomenon of self-hosted WordPress will be overtaken by people buying cheap static hosting from giants such as Google (who have unrivaled economies of scale) and Amazon (whose investors apparently don't care about profit), while embedding various types of dynamic content (such as comments, contact forms, availability calendars, appointment booking etc) via a range of smaller companies.

I would very much expect Automattic to be part of that - if you think about it, their core technical competency is to cleverly handle a mix of dynamic and not-so-dynamic content, while their leading position and scale in the current paradigm actually leaves them well-placed to handle such a major transition. This might even be part of the thinking behind Jetpack.

By the way, if anyone is dumb enough to want to get into the hosting game, they should consider building a dynamic posting gateway to static hosting such as Cloudfront, in the same way that many backup services are just layers in front of S3. I reckon there is a lot of commercial potential there, especially if the market shifts in the direction I've predicted above.