When you’re tasked with selecting the right hosting solution for your business, it’s a matter of time before you compare cloud hosting and virtual private server (VPS) hosting.
Both hosting types are equally valid choices for mid-sized companies since they offer the power and versatility a growing business requires — without breaking the budget with an overly higher-end hosting solution.
While cloud and VPS are similar in many ways, they’re very different in others. That’s why deciding on cloud hosting vs. VPS hosting will depend on your specific business needs. This guide will cover the major differences, why they would matter, and how to choose the optimal option for your situation.
Quick overview of VPS and cloud hosting
Before comparing cloud and VPS hosting, understand them on a technical level. While both deliver high-speed hosting, the way it works is significantly different.
VPS hosting
VPS hosting uses virtualization technology (also called a hypervisor), which means a single physical computer gets virtually divided into several computing environments. Each virtual server functions independently and has allocated resources, such as CPU, RAM, bandwidth and storage.
Unlike shared hosting, the isolated nature of a virtual private server means that each instance doesn’t affect the others’ server resources. In plain words, VPSs don’t fight each other for processing power, storage, bandwidth, or anything else.
Moreover, modern VPS hosting solutions now often incorporate advanced hardware, such as the latest AMD EPYC CPUs, NVMe Storage, and DDR5 Memory, to enhance performance and reliability.
VPS hosting is typically used for mid-sized businesses that have outpaced shared hosting but don’t yet have the revenue or workload to justify the investment of dedicated server hosting.
Typical VPS use cases include:
- Websites receiving moderate traffic that’s relatively stable.
- Small to medium-sized eCommerce stores.
- Software development, staging websites and test environments.
- Web developers and agencies that maintain multiple client websites.
- Anyone requiring a higher level of control over server configuration.
Cloud hosting
Cloud hosting is similar to VPS in that it relies on virtualization, but its approach is more decentralized. “The cloud” is simply a distributed network of physical servers in several data centers across the map. You can pay a cloud provider for remote access to this network and a computing environment to work with.
The cloud approach offers maximum scalability; with such an extensive and distributed network of available servers, the provider can easily allocate more computing resources to your project if you need it.
Cloud hosting solutions often include features such as automatic load balancing, real-time resource allocation, and robust global server infrastructures. These features ensure high availability and performance.
Cloud hosting plans also use hypervisors combined with orchestration tools that automatically allocate resources to users. Besides being able to provision resources on demand, this also enables automatic load balancing — so whenever your project’s resource usage nears the limit, you’ll receive more cloud computing power.
Cloud hosting is effective for businesses of any size. Pay-as-you-go models are common, and customizable specifications are usually supported and scalable.
Typical use cases for cloud hosting platforms:
- Web hosting with fluctuating traffic and variable resource needs.
- Apps that need extensive resources.
- SaaS platforms that rely on 24/7 availability for users.
Industry trends
Cloud hosting is the most popular and widely adopted alternative to VPS. There’s a stark difference in market share, and 94% of enterprises use cloud services.
Cloud infrastructure spending is constantly accelerating — it grew by 21% in the first quarter of 2024 alone. Cloud providers are constantly fighting a fierce battle over the top spot, losing and gaining market share year by year.
On the other hand, many mid-sized businesses still rely on VPS solutions. There are distinct scenarios where VPS does win over cloud hosting, so pay attention to the comparison.
Cloud hosting vs. VPS hosting
Several key factors come into play while comparing VPS hosting vs. cloud hosting. Cloud tends to outperform VPS in performance, scalability and reliability. VPS is usually the winner in terms of cost-effectiveness and ease of use. With other factors, like security and maintenance, your unique project requirements and preferred hosting provider should guide your decision.
The main factors we’ll compare are price, performance, security, scalability, reliability and maintenance. Sit tight to see how cloud hosting and VPS hosting stack up.
Price
When it comes to cost-effectiveness, VPS hosting holds the advantage. You typically pay a fixed monthly fee for dedicated resources, making it easier to budget for hosting expenses. This stability is beneficial for businesses with consistent workloads or strict budgets.
Cloud hosting often offers a more flexible pricing model, with pay-as-you-go options that allow you to adjust resources based on demand. Typically, this freedom comes at the cost of pricier rates per resource. While you can feasibly save money during low-activity times, you might be shocked at a bill after an unexpectedly high consumption period.
Imagine you’re a small business owner running an eCommerce store that receives a moderate but predictable amount of traffic. Typically, VPS hosting will be more affordable for you.
Imagine you’re a small business owner running an eCommerce store that receives a moderate but predictable amount of traffic. Typically, VPS hosting will be more affordable for you.
Example number two: You’re the same eCommerce store owner, except you see significant seasonal traffic spikes. With VPS hosting, you’d need a more expensive plan to accommodate the high end of your usage.
With cloud hosting, your resources will scale as needed, and you’ll pay accordingly; during low-traffic periods, you’ll save money.
Performance
Performance is usually a top concern while running any type of database, website or application. While both cloud and VPS hosting can deliver high performance, a cloud hosting environment typically holds an advantage due to its scalable architecture.
Cloud servers are designed to handle a dynamic workload by distributing it across multiple servers. Even during traffic spikes and heavy resource usage, cloud servers use autoscaling to prevent slowdowns and downtime.
Cloud hosting also features optimized cloud infrastructure, built-in CDNs, and edge server caching that further enhances site performance.
In contrast, a VPS hosting option relies on a single physical server, which has a limited peak performance under heavy loads. This can be mitigated by optimizing your server configuration and investing in better hardware. You can also utilize advanced VPN plans that incorporate the latest AMD EPYC CPUs, NVMe storage, and DDR5 memory for enhanced performance.
Having said that, VPS can’t still beat an entire network of cloud architecture.
Make no mistake, though: If your projects are straightforward, like gaining faster performance on your WordPress website or online store, VPS will get you there.
Security
Security should be a significant consideration for any business. Of course, both cloud and VPS hosting will protect your data and offer a secure work environment. But which handles it better?
Cloud hosting offers an advantage here due to its distributed, redundant nature, where data is typically stored across multiple servers and locations. This architecture provides high availability and includes built-in failover systems to ensure data integrity and uptime. But for the same reason, infamous security breaches have happened on cloud networks, even for the most advanced enterprises like Facebook and Amazon.
That’s not to say cloud hosting is defenseless. Cloud hosting is typically managed for you, so technicians will promptly install any security patches that get released. Additionally, cloud hosting solutions often come with robust security features, including DDoS protection, web application firewalls, encryption, and automated backups. These features ensure comprehensive protection against various threats.
In contrast, VPS hosting relies on a single physical server, so it’s less redundant but more isolated. You can equip your VPS with security measures until it’s a fortress against cyberattacks. Modern VPS plans can also include advanced security features such as enhanced DDoS protection and optional backup services. Plus, VPS plans typically offer root access, meaning you can install more comprehensive security programs. However, that’s work cut out for you and your team.
Scalability
Scalability is your freedom to adjust server resources to accommodate changing demands. In this aspect, cloud hosting consistently holds an advantage over VPS hosting.
Thanks to an expansive infrastructure and programs that can automatically provision servers in response to changing workloads, cloud hosting allows businesses to respond quickly to traffic spikes.
In contrast, VPS hosting relies on a singular physical setup and fixed resource allocations. If you wanted to, you could set up clusters of physical servers and then configure a load-balancing program that distributes traffic across multiple virtual machines. Cloud hosting has that built in.
Reliability
How does reliability compare on cloud hosting vs. VPS servers? Cloud hosting wins out here due to its inherent redundancy.
Cloud hosting is fault-tolerant by nature, and its infrastructure has built-in failover mechanisms. Service is generally uninterrupted because even if your cloud server does go down or have issues, there’s always another one ready to take its place.
Since VPS relies on just one physical server, if that server goes down, your website or app will also go down. Load balancing strategies can minimize the impact of any downtime, and investing in VPS infrastructure to create redundancy can help, too.
Maintenance
Both VPS and cloud hosting require maintenance in distinct ways.
Fully understanding how to set up and troubleshoot cloud stacks can be confusing; it often requires a dedicated technical team. Luckily, many cloud hosting providers offer managed cloud hosting, which takes maintenance off your shoulders, including updates and backups. Managed cloud hosting platforms often include automated updates, security patch installations, and comprehensive backup solutions. These features ensure your system is always up-to-date and secure.
Moreover, some cloud hosting services offer round-the-clock support, so you always have an expert to help with any issue that arises.
VPS hosting is far less technically complicated. However, you may end up responsible for server installation and maintenance since unmanaged VPS hosting is far more common. If you opt for a managed VPS plan, similar to managed cloud hosting, the provider will handle most of the maintenance tasks for you, including software updates and security management.
Conversely, managed cloud hosting is often the default, which makes it easier for beginners — yet offers less control.
Who should use cloud hosting vs. VPS hosting?
Cloud hosting is often the preferred choice for business owners seeking maximum flexibility, scalability, and performance.
Cloud hosting is often the preferred choice for business owners seeking maximum flexibility, scalability, and performance.
Thanks to its widely distributed infrastructure, pay-as-you-go pricing model and easy maintenance, cloud hosting is often suitable for:
Startups and growing businesses: Cloud hosting allows startups to scale resources as needed without significant upfront investment. Should growth happen rapidly, you won’t need to scramble to move to a new host.
For instance, Bluehost Cloud offers real-time scaling and automated resource management, making it easier to handle sudden growth.
Businesses of any size: Cloud infrastructure allows you to use exactly the resources you need at any point — no more, no less. This elasticity ensures you are only paying for what you use, optimizing cost efficiency.
eCommerce websites: The dynamic nature of eCommerce demands scalable infrastructure. Peak seasons and hot sales can generate a lot of traffic, but paying for that threshold year-round is an unnecessary money sink. A pay-as-you-go model can work wonders.
SaaS platforms: Software providers benefit from reliable cloud infrastructure that allows them to deliver uninterrupted service to their customers. Cloud platforms also facilitate flexibility in scaling resources according to user demand.
On the other hand, VPS hosting is an excellent choice for business owners prioritizing cost-effectiveness, control and predictability.
On the other hand, VPS hosting is an excellent choice for business owners prioritizing cost-effectiveness, control and predictability.
VPS hosting is often best suited to:
Medium to large businesses: Established businesses with predictable workloads will make VPS hosting more cost-effective than cloud hosting. For example, With advanced Bluehost VPS plans featuring the latest hardware such as AMD EPYC CPUs, NVMe storage, and DDR5 memory, businesses can achieve high performance without the premium cost of cloud hosting.
Companies requiring customization and control: Business owners that require complete control over the server environment may prefer VPS hosting. Cloud infrastructure is often fully managed, and it’s usually more challenging for developers to work with its advanced features.
Businesses on a budget: Pay-as-you-go models are enticing, but watching the rates fluctuate can be stressful when you’re on a strict budget. If your workload is consistent and you’re confident in your VPS server’s ability to handle the project, try the fixed pricing of VPS plans.
Final thoughts: VPS vs. cloud hosting
While the cloud hosting vs. VPS hosting decision is tough due to the similarities, there are a few stark differences that will dictate which is best for your business. Cloud computing is the most flexible and versatile option, but VPS is a reliable choice and a step toward dedicated hosting.
When you’ve decided, check out Bluehost’s managed cloud and VPS hosting; both have a 100% network uptime guarantee. Whether you prefer the cloud’s scalability or VPS’s stability, our powerful hosting infrastructure will back you in any venture.
