Are people more willing to pay for service-oriented startups?

It is quite difficult to persuade users that your product-oriented startup is enough valuable for them to pay for it. They like your product, they use it, they consider it to be cool, but it is a big problem to move from free to > $1 plan. But almost no one have a problem with paying for servers, hosting, domains, webdesign, promoting, etc. Is not it a better idea (or safe idea) to start service-oriented startup? Sure, it should be some of the scalable service providing.

Because of all these considerations, we decided to try providing such a service - http://linuxgeek24.com/ - Linux administration on demand with affordable monthly server management plans. What do you think about this idea?