Cloud Servers vs Dedicated Servers: Which is Better for Business?

Posted on by Jake Fellows | Updated:
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Choosing between a cloud server vs dedicated server solution is an important decision for your company.

In the past, it was common for businesses to start off on a shared Linux server when first learning about web hosting and then upgrade to a dedicated server to support increased web traffic as the website scaled in growth.

Today, the new paradigm of cloud hosting means that businesses don’t necessarily need to follow this traditional path and can start building a website on a managed cloud plan with pre-integrated platform support for Varnish Cache, Memcached, Nginx, CDNs, etc. that previously would have taken many hours in developer time to build on a custom dedicated server independently.

Cloud hosting plans offer scalable server resource allocation based on hardware virtualization, whereas dedicated server plans include a fixed allocation of isolated RAM, CPU, and SSD/HDD storage that can provide better performance and increased security for online business applications. There is even hybrid dedicated cloud hosting which utilizes a single parent server’s resources based on dedicated hardware.

Elastic cloud solutions can scale to provide higher levels of web traffic support than a single dedicated server can provide and are increasingly becoming an essential aspect of keeping the most popular websites and mobile apps hosted online.

private cloud

VMWare Partner

Managed Private Cloud powered by VMware and NetApp delivers all the benefits of a traditional public cloud with the power, performance, and security of an isolated infrastructure on dedicated hardware.

What is Cloud Hosting?

Cloud hosting is a way of hosting websites by spreading data over several machines rather than a single server. Users manage their data by using a “virtual machine” that access the various servers in the cloud. When comparing a cloud server vs dedicated server, a notable difference is that cloud hosting accesses the computing power and services of multiple machines.

Many of the new retail dedicated cloud hosting plans available for small business website publishing support are based in webserver network management software improvements derived from “big data” in enterprise corporations where the scalability requirements of the largest websites in the world are the responsibility of DevOps teams in IT companies like Google, Facebook, Microsoft, Oracle, and IBM, as well as hosting companies like Liquid Web, Rackspace, and Amazon.

How Does Cloud Hosting Work?

When comparing a cloud server vs dedicated server, it is first necessary to understand how cloud servers work. Cloud hosting utilizes a virtual server that uses cloud computing technology to distribute data among connected servers located in different areas.

It is important to understand the difference between cloud hosting frameworks, as well as how these services relate to the specific web hosting needs of small businesses, SMEs, start-up software companies, and enterprise corporations (such as multi-nationals or Fortune 500 brands) uniquely, with particular cost-saving solutions targeted to each market sector.

Business website owners also need to understand the differences between Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) plans.

The main advantage of a cloud hosting product is for a small business to take advantage of an enterprise-grade SaaS/PaaS solution at a fraction of the cost of developing the software independently."

Cloud hosting plans include managed platform security which, along with elastic scalability, mainly distinguishes them from dedicated server solutions with isolated hardware and customized webserver software stack environments.

Many cloud plans use a “pay as you go” approach rather than fixed rates for billing which allows them to scale to provide more CPU cores, RAM, or I/O processes on demand for web traffic spikes that can overwhelm shared hosting plans. Elastic cloud platforms manage multiple virtual servers and databases simultaneously, synchronizing changes across versions and caching web pages for anonymous browsers.

Whether you’re developing in PHP or .NET, Linux or Windows, or hosting WordPress, Drupal, or Joomla, cloud hosting lets you quickly launch and manage your sites effortlessly.

Main Differences Between Dedicated Server Hosting and Cloud Hosting

Comparing dedicated server vs cloud hosting is an important part of the process of a business establishing its web presence. Ultimately, the decision comes down to how each server addresses the needs of an individual business.

For most small business web hosting requirements, cloud hosting solutions offer webserver resource scalability options that compete at the same price levels as dedicated server hardware for high traffic websites.

Many cloud platforms use a single webserver stack software that will not support the custom software requirements of legacy web applications or databases, making dedicated server plans a necessity. In most cases, cloud hosting plans offer a “plug and play” PaaS option that small business owners can transfer existing websites to for better webserver performance at scale with integrated page caching.

Dedicated servers provide base hardware resources that developers can custom install with the programming language extensions, tools, utilities, and third-party frameworks required to program complex, database-driven web and mobile applications. Over-provisioning dedicated server hardware for web and mobile applications can lead to better performance, based on virtualization with thousands of domain names active on a single server instance that can happen with shared vs dedicated hosting.

Advantages of Cloud Hosting

Although there are a wide variety of cloud hosting plans, platforms, and services, each unique to the company and programming team developing them for market, the main advantages of cloud hosting plans is that they provide pre-installed elastic webserver support with custom stack software optimized for CMS websites running on LAMP.

CMS site owners receive better overall performance on cloud hosting through a combination of premium hardware configurations, SSD storage options, load balancing on network traffic, and multi-layered database, PHP process, and web file caching services, including CDN integration."

Cloud hosting allocates more RAM, CPU cores, and I/O processes to CMS websites than shared hosting plans while allowing each site to scale to consume more resources on-demand, according to the web traffic requirements in live production. This ensures that websites remain “always on” under any web traffic conditions and that web pages will load faster under normal conditions of community use.

Take control over your hosting environment

Disadvantages of Cloud Hosting

The disadvantages of retail cloud hosting under the PaaS model compared to a dedicated server plan is that systems administrators or web developers may not have the full flexibility required to modify the webserver stack software installation in order to build custom solutions.

For example, there is no ability to change the operating system or install alternative webserver platform software like Nginx, Tomcat, Hadoop, Lightspeed, or Lighttpd on retail PaaS cloud hosting plans.

However, cloud hosting plans available under “pay as you go” approaches AWS, Google Cloud, and other companies do allow easy webserver stack customization using snapshot services. Small business owners normally find managed WordPress hosting and retail cloud plans offered with LAMP PaaS options easier to use when transitioning from shared hosting for better performance, while the cloud computing plans offered with more stack flexibility require experience in systems administration and function similarly to VPS plans.

How Does Dedicated Server Hosting Work?

A proper discussion of cloud server vs dedicated server would not be complete without looking at how dedicated servers work. Businesses lease dedicated servers from hosting service providers and are able to then have the server customized and configured to their specific needs.

The advantages of dedicated servers are that systems administrators can configure them for the exact level of web traffic that is required to support online operations.

Where this is variable, website owners need to provision dedicated servers with over-capacity that will also provide better performance during periods of less than peak traffic activity.

Advantages of Dedicated Servers

Customization is a key advantage of dedicated servers. Companies that need to handle a lot of traffic or run complicated applications often find that differences in cloud vs dedicated server cost are not as important as having a server configured to their unique needs.

Web developers and programmers require dedicated server hardware to create custom webserver environments for complex application support. This can include installing alternative operating systems for the webserver, custom developer extensions for programming languages, performance-enhancing utilities like advanced page caching systems, or alternative database frameworks to MySQL.

Java, ASP.NET, Node.js, PHP, and Python developers all require dedicated server hardware that can be fully customized to build new applications or support legacy software online with specific runtime requirements. Dedicated servers can be optimized to support high levels of web traffic for eCommerce, media, publishing, promotions, and more. You can even get a dedicated server for WordPress.

Disadvantages of Dedicated Servers

The main disadvantage of dedicated servers is that, under an unmanaged approach, systems administrators must be responsible for all aspects of web security, which includes the operating system (OS) and all installed extension frameworks.

Dedicated servers with a managed stack software environment are continually updated by remote technicians in the data center with security patches, but this can create data access issues with unregistered employees that are unacceptable to some business operations.

The cost of leasing remote dedicated servers can even be higher than buying and provisioning the hardware locally, although it is difficult to replicate the speed of fiber optic network resources in a world-class data center or international colocation facility.

Trust in the web hosting company includes reliance on a third-party team for support, technical assistance, and debugging in operations that can be mission-critical for business website support, but not every hosting company is guaranteed to be consistent in this at a level to be reliable, leading to a potential loss of business or occasional webserver downtime that cannot be predicted.

Cloud Sites

Liquid Web Cloud Sites Service

Liquid Web’s Cloud Sites service is an excellent example of how managed cloud hosting platforms with elastic scalability are providing enterprise-grade solutions for small businesses and SMEs that are both cheaper and more powerful than dedicated servers. Liquid Web’s Cloud Sites platform is designed to work to optimize the performance of websites built with WordPress, Drupal, Joomla, PHP, and .NET through pre-installation of optimized stack software on the webserver.

Elastic scalability is automated with Cloud Sites so that new server instances launch on-demand or as scheduled to meet the user requirements of web traffic spikes. Liquid Web’s Cloud Sites plans are more cost-effective than many dedicated server plans and also scales to support more web traffic under peak activity than dedicated hardware or VPS plans can manage.

This can be vitally important for eCommerce websites that can lose business during peak sales periods like holidays, weekends, and special promotions unless a scalable webserver framework is deployed.

Liquid Web’s Cloud Sites plans can scale to support over 500 billion page requests per year on a fixed price monthly framework to illustrate how managed cloud hosting platforms are replacing dedicated servers for preferred use in support of web publishing, eCommerce, social media, and mobile applications.

Choosing the Right Server for Your Business

Instead of moving from a shared hosting account to a dedicated server with more hardware resource allocations, business owners can now choose cloud hosting plans which scale to provide more CPU cores, RAM, or database instances automatically as required by web traffic (“elastic scaling”).

When combined with a “pay as you go” approach or cheap fixed-rate billing, this can be more efficient than estimating required server overcapacity manually to match peak hours with downtime levels of website traffic.

The most important aspect of web hosting for many business websites is the ability to install a custom webserver software stack platform to support needed third-party programming language and database extensions for complex web and mobile applications with custom code.

Dedicated servers were traditionally the way to go, but cloud computing options are becoming increasingly more competitive alternatives for building small business software solutions at an affordable price. This makes the cloud server vs dedicated server debate even more interesting.

It is now possible for small businesses and SMEs to host their websites with elastic server capabilities on retail PaaS cloud hosting plans at a fraction of the cost of comparable dedicated hardware and with the same enterprise quality services the largest companies in the world use to maintain their daily internet operations at scale.

Find Out Your Cloud Hosting Options

See how Liquid Web’s hosting products can provide scalability and performance at an affordable cost.

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About the Author

Jake Fellows

Jake Fellows is the Sophisticated Hosting Product Manager for Liquid Web's Managed Hosting products and services. He has over 10 years experience involving several fields of the technology industry, including hosting, healthcare, and IT-system architecture. On his time off, he can be found in front of some form of screen enjoying movies, video games, or researching into one of his many technical side projects.

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