I think a better question to ask yourself would be: Who am I going to sell this to? There are some tasks where local hosting offers advantages, but for the vast majority of websites there is very little difference between having a server located in New Zealand or the United States. Therefore, few people are willing to pay the price premium. Those that do require local hosting generally have needs that are greater than what shared hosting is able to offer.For all the users in New Zealand who are looking for paid hosting here, How much would you guys pay for about 1gb of space and 2gb bandwidth per month? I am thinking of starting a paid hosting company with a server in New Zealand and wondered how many would be interested.
I think a better question to ask yourself would be: Who am I going to sell this to? There are some tasks where local hosting offers advantages, but for the vast majority of websites there is very little difference between having a server located in New Zealand or the United States. Therefore, few people are willing to pay the price premium. Those that do require local hosting generally have needs that are greater than what shared hosting is able to offer.