What is the difference between VPS and cloud hosting?
A VPS (Virtual Private Server) is a dedicated virtual server hosted on a physical machine. In contrast, cloud hosting is based on a network of distributed servers and allows for more flexible scalability and greater failover reliability. Depending on specific requirements, business goals, and IT expertise, both hosting models offer distinct advantages and disadvantages.
What is VPS and cloud hosting?
Having a powerful IT infrastructure is crucial for companies who want to remain competitive in today’s market. Without suitable hosting, success can be difficult to achieve. However, choosing the right hosting solution is not a straightforward task. There are a wide range of options, including shared hosting and dedicated hosting models. With these models, you can share external server resources or rent dedicated servers. Additionally, outsourcing IT infrastructure through colocation is another possible approach.
The hosting models virtual private server (VPS) and cloud hosting are very common. However, they differ significantly in how they operate. To help you decide which hosting option is right for you, we’ll compare the two and go over the most important advantages and disadvantages.
The differences between VPS and cloud hosting
Both virtual private servers and cloud servers are based on the principle of virtualisation. This means that the resources from a physical server are segmented into virtual machines. These are then made available to customers, who can use them just like real physical servers and according to their needs. Having virtualised options means companies are not dependent on having their own expensive data centre.
Virtualised IT resources such as hardware and software, storage capacities and network components are provided by external companies with VPS and cloud hosting. These provide the resources following the XaaS (Everything as a Service) model. While VPS servers are dedicated, independent segments of a physical server, cloud servers belong to a flexible pool of distributed servers, which can be easily scaled.
- Unlimited traffic and up to 1 Gbit/s bandwidth
- Fast SSD NVMe storage
- Free Plesk Web Host Edition
Difference 1: Provision
Although VPS and cloud hosting both use virtualised systems, they differ fundamentally in the way they are provided.
VPS: A VPS requires renting a virtual private server from a hosting provider. Although a VPS is a segment or partition on a physical server, a VPS functions as a closed, independent server system. VPS offers better value for money than many dedicated physical servers, which can be an important factor when deciding whether to choose a VPS or dedicated server. A VPS is created and managed by a hypervisor. A hypervisor is software on a physical server, which manages VPS segments and allocates resources such as memory, computing power and network components to customers.
Cloud: Unlike VPS, cloud hosting is not limited to physical resources with fixed partitions. This is in line with cloud computing. Instead, a networked pool of hardware and software resources is used. Computing power, storage capacities and network components are provided flexibly through a server network of clusters and nodes. Additional resources can be distributed dynamically as required and according to workload.
Difference 2: Scaling
When it comes to scalability, cloud hosting is the better option. In fact, easy scalability is the main argument in favour of cloud servers. Unlike VPS options, you don’t need to contact your provider to change resources or configurations. Changes can be made directly in a dashboard. If you need more storage capacity, more applications or more computing power, you can just extend your subscription package or adjust the resources accordingly on your dashboard.
VPS can also be scaled, but hardware upgrades are usually required for resource expansion. This is because performance and scalability are limited to the host server’s physical components and capacities. Cloud services offer a broader network of physical and virtualised components. While you can rent additional VPS instances, scaling in this setup typically involves more effort.
Difference 3: Data security
VPS is in a league of its own when it comes to security. Independence and encapsulation are the main advantages of virtual servers. Every VPS segment on the host platform is shielded from the VPS segments of other customers on the server. This means that your data remains invisible to other users, and it is also not affected by failures or errors in other segments. This is because your operating system is independent, and you have your own configurations. Nevertheless, it is important to check the host’s security standards and the server being used.
Although data security in cloud computing also depends on data centre security, the cluster structure in a cloud guarantees higher reliability and fault tolerance. Since workloads are distributed flexibly in the cloud, when a physical server fails, it does not mean that every segment fails. A private cloud offers the best protection for highly sensitive data if you are choosing between a private and public cloud.
Difference 4: Cost
VPS and cloud hosting don’t differ greatly in terms of costs. Typically, you can choose from a set of monthly subscriptions that offer different services and storage capacities. These start at just around £3 to £4 per month. VPS is good value for money if you are a small or medium-sized company and need independent resources for projects with calculable workloads.
On the other hand, cloud hosting is suitable for both small and large projects with a lot of traffic and performance peaks. The fees for cloud services are usually based on performance requirements. However, hosting companies like IONOS cap costs by guaranteeing a maximum monthly fee. This prevents additional expenses resulting from high storage requirements.
Difference 5: Individualisation
Individualisation and customisation are VPS hosting’s other main strengths. However, it requiresin-depth knowledge of network administration. Root access will allow you to configure your virtual server as required, just like you would a dedicated server. This includes installing the operating systems, software and applications of your choice. Although VPS hosting is limited to physical components such as memory and network cards, you can make individual configurations for your performance capacities.
Cloud hosting customisation is also possible. However, this depends on the cloud package and the range of services offered. You can create the virtual networks or install the operating systems and services that you require with IaaS (Infrastructure as a Service) models. Virtual network devices with cloud hosting perform like individually configured, physical network components and offer huge scalability. Some companies also provide microservices as building-block modules. These also let you customise your functions.
Difference 6: Availability
Cloud servers win in terms of availability and fault tolerance. VPS does not perform well here. When the host server fails, the VPS server hosted on it fails as well. On the other hand, cloud servers rely on a flexible cluster network that stays functional even if individual physical components fail. Unlike a VPS server, clouds servers are not tied to fixed hardware, and they are highly available thanks to flexible scalability and fault tolerance.
Difference 7: Data protection and data sovereignty
Data security is not the same as data protection. Data protection depends on server’s protective measures and its location. The Cloud Act grants U.S. intelligence agencies access to customer data stored by U.S. companies. Both VPS and cloud hosting solutions from U.S. providers are subject to U.S. legislation.
Difference 8: Edge Integration
With edge computing, parts of the computing workload are no longer handled centrally in a data centre, but rather decentrally at various geographic locations—at the ‘edge’ of the network, closer to users or data sources. Cloud providers enable this through specialised edge services that integrate seamlessly into existing cloud environments. This makes it possible to significantly reduce latency, use bandwidth more efficiently, and even run certain applications like machine learning directly on-site.
VPS hosting, on the other hand, typically relies on traditional, centralised servers located in a single data centre. Distributing the processing load regionally or globally is either not possible or requires significant technical effort. For applications that require real-time performance or a distributed infrastructure, a VPS is often less suitable.
Difference 9: Sustainability
An increasingly important factor when choosing between VPS and cloud hosting is sustainability. Larger cloud providers in particular are increasingly committed to using green energy, energy-efficient hardware, and optimised cooling technologies in their data centres. Many also publish regular transparency reports. For companies that prioritise environmental standards, this can be a key deciding factor.
With traditional VPS offerings, the environmental impact largely depends on the specific hosting provider. While some data centres also rely on green electricity and efficiency measures, smaller providers often lack certifications or documentation related to energy consumption.
Pros and cons of VPS
| Advantages | Disadvantages |
|---|---|
| Independent, isolated VPS servers | Expanding resources and capacity is not very flexible (can be costly and time-consuming) |
| Fully customisable thanks to root access | Management and maintenance require solid IT expertise |
| Reliable performance due to dedicated hardware resources | Prone to failure, as issues on the physical server can affect all VPS segments |
| Issues in other customers’ VPS segments do not affect your own server | Performance is limited to the physical server’s allocated hardware |
| Good price-performance ratio with low setup costs and fixed fees | Better suited for limited projects and smaller teams with predictable workloads |
Pros and cons of cloud hosting
| Advantages | Disadvantages |
|---|---|
| Excellent scalability | Optimal data protection is generally not guaranteed in a public cloud (but is possible with private cloud hosting) |
| Flexible and cost-effective scaling of resources and computing power for small, medium, and large businesses | Greater dependency on the cloud provider |
| Highly resilient to hardware and network failures | Customisation depends on the provider’s subscription packages and feature offerings |
| Fees are based on actual usage (flexible upgrades and downgrades) | Full GDPR compliance is only ensured with European providers using servers located in Europe |
| Reliable performance even during traffic peaks | |
| Features and functionality can be tailored through various subscription packages and microservices |
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Who would benefit from using VPS or cloud hosting?
Depending on your performance requirements and company size, VPS and cloud hosting are suited to different types of projects and users.
VPS servers
- Demanding online projects with predictable workloads and storage requirements
- Online platforms with high traffic and active communities
- Medium to mid-sized business websites and online shops with consistent traffic
- Web presence for small to mid-sized enterprises
Cloud servers
- Online presences such as small to large webshops with fluctuating usage levels
- Depending on the cloud hosting offer: online platforms of small to very large companies
- Small to medium-sized businesses that need to temporarily scale up resources on demand