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The Rails response will (inevitably) be, "we don't WANT to be big" (which I think is stupid, too.
Another side effect of being big-- you can sell installable products in the language. How do you think Mint ( the stats mint-- not the finance mint) would fare if he had released it for Rails (it's an installable PHP stats package).
Rails playing nice on shared hosting would make Rails better, would provide a incubator for budding devs, and provide a marketplace for low-cost Rails products.
But I think you have also missed one of the main features of Rails...the development environment and local webserver.
People who want to learn Rails don't even need to pay $5/month. They can pay $0 by learning how to use it on their local machine. Granted, this doesn't get them a publicly accessible webserver, but it's enough to develop an application and find out if it's worth paying $10-20/month to deploy.
When I started web development with Perl in 1997, I had to compile Apache, figure out how to edit configuration files, and stumble through arcane (or absent) error messages. Because of that, I became pretty confident in configuring Apache, but I wouldn't have needed to learn that if I had something like the Mac OS X Locomotive app for Rails. You download it, hit the Go button, and you're running a local development webserver with Rails.
If you like the way it works, then you can pursue other options for making it available on the Internet.
>> David Heeneymeeneymeineymoe Hansson
So awesome.
I don't think that the rails core team care whether rails becomes as popular and widespread as php. The company behind php (Zend) has a business model based on widespread usage of php. The more people use php, the more money they make. Their whole business is based on making php easy to setup and deploy.
On the other hand the companies on the rails core team build web applications. Their business model is based on making money from these applications, not from the framework itself.
Dreamhost a hosting business. If they want to make money from making rails easy to deploy on a shared host they should hire someone to implement this functionality. It would benefit them in the long run and would be more productive than complaining about it.
If Dreamhost does figure out a solution, they'll probably keep it to themselves, and then you'll have Rails running well on one shared hosting company. To rival PHP, they need it on every one. That's why it has to come from the rails community, not Dreamhost.
It would be silly to argue that shared hosting is a good choice for everyone, and it's equally silly to argue that it's not a great choice for the new developers that are the lifeblood of any community.