How Public Cloud ate private hosting: an illustration of the Innovator's Dilemma

I know a guy who invested 60-70k in hosting servers and started a startup in cloud computing. He makes around 6-7k a month so around 4-5k after cutting all the costs (basically a salary since he maintains that all day long). I think it's a fine business even in the modern times, but the market is probably oversaturated and it's kinda hard to get consistent revenue since if you raise the price, most people will leave you and you kinda need to be trusted to have a company buy a lot of computing power from you.