What is the difference between VPS and cloud hosting?

VPS (virtual private server) hosting has been around longer and remains a popular choice for businesses thanks to its versatile admin features. However, cloud hosting has taken the lead as the most flexible solution with the best scalability. Cloud hosting is suitable for both small projects and large enterprises with huge workloads. Depending on a company’s requirements, business goals and IT skills, both hosting services offer their own advantages and disadvantages in terms of data security, price and scaling.

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.


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VPS vs. Cloud hosting

Both virtual private servers and cloud servers are based on the principle of virtualization. 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 virtualized options means companies are not dependent on having their own expensive data center.

Virtualized 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.


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Difference 1: Provision

Although VPS and cloud hosting both use virtualized 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 favor 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 plan 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. On the other hand, cloud services offer a larger network of physical and virtualized components. Renting additional VPSs is often associated with 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 center 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 $4 to $5 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: Individualization

Individualization and customization 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 customization 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 customize 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.

VPS advantages and disadvantages

Advantages Disadvantages
Independent and shielded VPS servers Inflexible resources and capacity expansion (cost- and time-intensive)
Root access allows flexible configuration Management and care requires good IT skills
Reliable performance power through dedicated sharing of hardware resources Prone to failure, as errors on the physical server can affect all VPS segments
Other customers’ errors in parallel VPS segments do not affect your VPS servers Performance remains limited to the physical server’s hardware resources
Good value for money due to low-cost setup and fixed fees More suitable for limited projects and smaller teams with a calculable workload

A virtual server provides a powerful server without a complex setup. Try a free VPS trial from IONOS and discover the benefits of VPS free of charge for 30 days.

Cloud hosting advantages and disadvantages

Advantages Disadvantages
Great scalability Optimal data protection does not tend to exist in the public cloud (but it does in private cloud hosting)
Flexible and cost-effective expandable resources and computing power for small, medium and large enterprises Greater dependence on cloud provider
Highly resistant to failures in physical components and networks Customization and individualization options depend on subscription plans and range of functions offered by the provider
Fees are based on requirements (flexible upgrades and downgrades) Data protection is not guaranteed as U.S. intelligence agencies have access to customer data
Reliable performance during performance peaks
Scope of functions can be configured as needed with different subscription packages and microservices

Experience optimal cloud performance and scalability with the best security. You can test out cloud hosting free of charge for 30 days with the free cloud trial from IONOS.

Who is VPS or cloud hosting suitable for?

Your performance requirements and company size will determine whether VPS or cloud hosting is more suitable for you.

VPS server

  • Demanding online projects with calculable workloads and storage requirements
  • Online platforms with a large number of visitors and communities
  • Medium-sized business sites and online stores with higher traffic
  • Online presence of medium-sized business

Cloud server

  • Small to large online stores with fluctuating performance rates
  • Online platforms of both small and large companies (the ability to accommodate larger companies depends on the cloud hosting plans available)
  • Smaller to medium-sized companies that temporarily require more resources
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