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VPS vs Dedicated vs Cloud Hosting - Which Solution Is Best For Your Business?

Written by Mantas Levinas
on June 03, 2021

Websites are one of the most essential parts of a business in this modern-day of digital innovation. If your company doesn’t have a website, it’s at a disadvantage. The good news is that it can be very cost-efficient to maintain, build, and run a simple website. 

Whether you’re starting an online shop, building a blog, or a simple landing page, there are some decisions that remain constant. One is deciding what server is best. A server is basically a place where you host your website, store website files, and keep your website running. 

If you’re looking to start a website, or even planning to audit your current one, one thing that you should check is if your company has the right hosting server. Getting the wrong hosting can be an operational headache that can surface at any point. If your server isn’t strong enough, you’ll probably have a lot of website downtime. If it’s too robust, then you’re most likely paying for an underutilized service. 

Knowing if you have the right hosting server for your company begins by understanding the three types of hosting solutions and understanding their pros and cons and basic features. There are three types of servers generally:

  • VPS Hosting
  • Dedicated Hosting
  • Cloud Hosting

Let’s look at each one.

Virtual Private Server (VPS) Hosting

The first type of hosting is a virtual private server or VPS hosting. A VPS hosting is a type of shared hosting where you get a chunk of a dedicated server with other “server-mates” or people who are on the same server. If hosting were to be likened to real estate, it would probably be an apartment or condo building. 

It provides baseline resources that are highly guaranteed by a provider and a buffer resource in case you’re traffic spikes. But just like a condo owner has the responsibility of maintaining his or her own unit, VPS server owners need to also maintain their property. In the likelihood of errors on a specific server, you’ll need to repair that. The VPS market is poised to reach a market valuation of $2 billion by 2025. 

Pros of VPS Servers

  • VPS servers are more affordable than getting a dedicated or cloud server. You only pay for the space that you need.
  • Provides convenience and speed as it’s usually easier to manage and troubleshoot. 
  • A great entry-level option for companies that aren’t expecting too much traffic on their website.

Cons of VPS Servers

  • Compared to the other options we will discuss later on, VPS has the least cloud environment security available. 

  • Once your website starts picking up traffic-wise, you will have downtime as visitors peak. You will probably need to upgrade at that point.

  • In cases of unmanaged VPS, the configuration might be harder. But when comparing VPS vs dedicated hosting, it’s still relatively easy to manage and configure. 

Price and Verdict

VPS hosting goes for anywhere between $20 to $100 a month depending on the service that you choose. This kind of hosting is best for basic websites that might need a lower level of security, power, and storage.

Dedicated Hosting

Dedicated hosting is the tier higher than VPS hosting. Unlike shared hosting, getting one dedicated hosting allots one full server to your website or group of websites—meaning you get the whole infrastructure to yourself. In real estate language, you’ll get the whole townhouse to yourself. So you have all the freedom to customize and tweak as you like. But you still have to take care of your own virtual estate.

The dedicated hosting market has been growing by 5.6% annually and for good reason. The first reason is that traffic has been increasing as a whole for businesses worldwide, indicating that they’re getting more visitors and probably more leads through digital means. The second reason is that small to medium-sized businesses are now gaining more access to robust tools like artificial intelligence-based applications, automations, and other useful services.

Dedicated hosting can be rather expensive, but you essentially get what you pay for— higher performance, better security, and, in some cases, VIP access to customer support. 

Pros of Dedicated Hosting

  • You get one whole server to yourself. 
  • Speed is relatively better as you get access to all the server resources without anyone to share with.
  • Your server will have access to all customizable settings that your website will need to perform better.
  • Servers are tailored to the exact specifications and needs of the dedicated server owner’s website.
  • Better security, given that you’re the only one on that server and you won’t have to worry about traffic spikes of neighbor server users.
  • More dedicated customer support given that you pay for the whole server. Most web hosting companies will prioritize dedicated server owners given that they’re usually at par with business accounts.

Cons of a Dedicated Server

  • Higher cost. 
  • You’ll most likely need a technical team or personnel to maintain and optimize the server. A website is a company’s responsibility mainly, thus any website problems or downtimes will require the skill of a webmaster or developer.

Price and Verdict

Dedicated servers will cost companies anywhere between $80 to $500 a month depending on the level of customization and amount of space your website will need. This kind of plan works best for companies with high-traffic websites such as e-learning platforms, e-commerce stores, and news publications sites that get over 500,000 website visitors every month. Schools usually have their own server as well for their systems, which factors in when they consider school organization apps to deploy. Dedicated hosting also works best for companies that will require a higher level of security.

Cloud Hosting

The third type of hosting is relatively new and takes on the concept of cloud computing technologies which brings several machines together to act as one cohesive system. Cloud computing is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025, and the increase in the use of cloud hosting will help propel that growth.

So in essence, cloud hosting operates in small partitions of several servers at once. Imagine that your website server is a hotel or Airbnb where you have the freedom to jump from one unit to the next and only pay for whichever one you’re using instead of renting out multiple places at once.

You might ask “cloud hosting vs VPS which is better?” It really depends on the need. But one thing that sets cloud hosting apart is that it allows multiple servers to work together when traffic spikes, lessening the chances of glitches or downtime. Servers are still shared of course, but you get access to available resources on other servers that might have more capacity.

Moreover, having cloud servers becomes an advantage when servers go down. When comparing cloud hosting vs dedicated hosting, it’s way riskier when dedicated servers go out, because then your whole system goes down. With cloud servers, your system can transfer to another server when one goes down.

Pros of Cloud Servers

  • Higher reliability since you aren’t dependent on one physical server alone. Your system can hop around various data centers as needed.
  • Flexibility. When you need more space, better performance, or higher speed, you can expand your system to accommodate more traffic.
  • Pay only for the resource that you use.


Cons of Cloud Servers

  • Highly technical, and will require a team of specialists to tweak and maintain.
  • Security is at a higher risk since information jumps around various servers, making it easier for people to target your site.

Price and Verdict

While cloud servers are not much cheaper than they once were, they can still have a steep price point— often higher than VPS or shared servers by 20 to 50%. But they are much more affordable than dedicated servers. Cloud hosting is more flexible and can serve businesses of various sizes and traffic volume, but it will require some level of technical knowledge. 

Knowing Which Server Provider to Choose

There are definitely many options available online for server and hosting software providers. Do the important research before deciding which one serves your purpose best.