On DigitalOcean, as you go up the plan, you get higher per-core price as well.
https://www.digitalocean.com/pricing
$5 1 core - $5/core
$10 1 core - $10/core
$20 2 cores - $10/core
$40 2 cores - $20/core
$80 4 cores - $20/core
$160 8 cores - $20/core
$320 12 cores - $27/core
$480 16 cores - $30/core
$640 20 cores - $32/core
$960 24 cores - $40/core
This means that if your app is CPU intensive and distributable (e.g. Ruby on Rails), having many lower plans is better than a few higher plans for the best price performance.
There's a trade-off in having many servers, though - for instance, suppose you need 40 cores, $5 (1 core) * 40 VMs can give you the astounding $200/mo bill, but I'd rather have $160 (8 cores) * 5 VMs for $800/mo, because at this price point $200 or $800 doesn't matter much and payroll to the DevOps guy (read: me) is more of a concern. I'm happier when I have less servers to babysit.
In other words, DigitalOcean does a great job defining their pricing structure. It looks very practical for eyes of a seasoned developer like myself.
That said, there's a disruption in the game - Linode. They announced this week that they have now 8 cores on all plans.
http://blog.linode.com/2013/03/18/linode-nextgen-the-hardware/
I confirmed that my instances have been upgraded to amazing 8 cores, by just rebooting. To me, this is a mind blower - for 8 cores, Linode just asks $19/mo for minimum, instead of $160/mo from DigitalOcean. Sure, it's impractical to fully saturate 8 cores on the 512MB plan and in some benchmarks, DigitalOcean still outperforms the new 8-core Linode by a great margin.
But rumor says that Linode is going to double the memory very soon. When this happens, exhausting 8 cores with 1GB RAM is possible. But it also makes me feel like it's encouraging free-riders - people on the lower plans take advantage of one of the scarcest resources - the CPU. Linode has a unique answer to this problem - priority. 1GB plans have 2x priority than 512MB plans, etc. I don't know if that just means a 1GB plan has 2x people than 2GB, or there's actually some hypervisor-level constraint in place, but it seems to be working for them - considering that they have offered 4 cores to all plans for a long time.
Linode and DigitalOcean are the top two leading VPS providers, I really like them both. But for medium to large scale apps, I'd choose and continue to use Linode, for the CPU price performance being one of the reasons.
Now question is - how DigitalOcean will respond to Linode?