I work in international development. I wanted to explore how easily and cheaply an institution (or individual) can get started with their own Moodle site. So as an experiment I've set up a Moodle site (version 2.8) on the cheapest Digital Ocean VPS (512 MB RAM) and I pay $5 per month. I know this is a very basic site that can't take on many users (see Performance FAQ), but it could still be a big step forward for those at the starting line of online education. For $5 per month you can have your own fully working Moodle site online, hosted on a VPS (not a shared server), and you'll have root access. And with this solid setup you'll be in a good position to convince yourself and institutional authorities that Moodle is great!
For anyone who is interested, there are Moodle installation instructions on Digital Ocean, which nicely complement the instructions here on moodle.org.
I'd like to hear from others about whether it is worthwhile to recommend this approach as a "Moodle starter" for IT staff working with limited budgets in schools or universities in developing countries. The most obvious pitfall is of course that a Moodle site running on a 512 MB server is really for development or testing and not for production, but is there anything else to be concerned about?