VPS vs. Shared Hosting: Which One Is Right For You?

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The worldwide web hosting market reached $124.80 billion in 2023 and is expected to hit $395.84 billion by 2030. This growth emphasizes the importance of choosing the right hosting solution.

In the realm of web hosting, individuals and businesses are often confronted with a pivotal decision: VPS (Virtual Private Server) or shared hosting? The choice between these two hosting solutions can significantly impact the performance, scalability, and security of your website.

Especially when you decide to start a website, it becomes paramount to choose the right hosting solution that aligns with your specific requirements and goals.

Read on as we explore the features that set these hosting options apart and determine which one is the perfect fit for your online venture.

What Is Web Hosting?

Web hosting is a service that allows individuals and organizations to make their websites accessible via the World Wide Web. It involves renting or purchasing space on a server where website files are stored and served to users through the internet, providing the necessary technologies and services for websites to be viewed online.

Different Types of Web Hosting

Each hosting type serves different needs, balancing cost, resource allocation, and technical requirements, and guiding the selection process based on the website’s specific needs and growth projections.

A dedicated server offers exclusive control and resources but demands significant technical expertise, financial investment, and management effort, rendering it less practical for most users.

Consequently, the majority opt for renting server space, which segues into the critical decision between shared hosting and Virtual Private Server (VPS) hosting.

• Shared Hosting: Shared hosting involves hosting multiple websites on a single server, sharing resources such as CPU, RAM, and disk space. It’s cost-effective and suitable for websites with lower traffic volumes, requiring minimal technical management.
• VPS Hosting: A step up from shared hosting, VPS provides virtualized server space with allocated resources. It offers greater flexibility, scalability, and control, catering to websites with medium to high traffic, requiring more significant resource allocation than shared hosting can provide.

Let’s look at the two types in detail:

1. Shared Hosting

Shared hosting stands as one of the most accessible and budget-friendly options for individuals and small businesses looking to establish an online presence. At its core, shared hosting involves housing multiple websites on a single server, each utilizing a portion of the server’s resources, such as CPU, memory, and storage space.

This communal approach to web hosting offers a streamlined path to getting websites up and running, but it comes with its own set of characteristics that are crucial for potential users to understand.

Due to its affordability and simplicity of operation, shared hosting is the most preferred web hosting type. According to Demandsage, it has a market share of 37.64%. 

Below are the key features of shared hosting:

1. Shared Resources

The hallmark of shared hosting is in its name—resources are shared among all websites hosted on the same server. This sharing model can make shared hosting incredibly cost-effective, as the cost of server maintenance is distributed across multiple users.

However, it also means that your website’s performance can be influenced by the activities of others on the same server. For instance, a surge in traffic to another website on your shared server could potentially slow down your site. This stands in contrast to Virtual Private Server (VPS) hosting, where each user is allocated a dedicated portion of the server’s resources, thereby minimizing the risk of performance degradation due to other websites.

2. Cost-effectiveness

When it comes to affordability, shared hosting is hard to beat. Its low entry cost makes it an ideal choice for startups, small businesses, and personal blogs that do not require extensive server resources or high-traffic capacity.

This pricing advantage makes it a go-to option for those just starting, as opposed to VPS hosting, which, while offering more resources and better performance, comes at a higher price point.

3. Management and User-friendliness

Shared hosting providers typically offer a user-friendly control panel, such as cPanel, to simplify website and server management.

This user-friendly approach is especially beneficial for beginners who may not have the technical expertise to manage server configurations and settings.

Unlike VPS hosting, where users might need a higher level of technical knowledge to customize their server environment fully, shared hosting offers a more straightforward, managed experience.

Positives of Shared Hosting

• Beginner-friendly: No technicalities are involved in operating shared hosting. Even if you are a new website owner, operating it is hassle-free. The hosting provider gives you a preconfigured hosting space where you can immediately begin working on your website.
• Standard Setup: Shared hosting servers have a built-in c-panel that allows setting and managing a website easily.
• No Maintenance: As the server is shared among various users, the hosting provider takes up technical maintenance, which usually comes with the hosting package. So, server maintenance is not your problem.

Negatives of Shared Hosting

• Security: Though the hosting providers implement security isolation for shared hosts, there is a possibility that any security breach on one website can affect other websites on the server.
• Limited Resources: Sharing server resources with multiple users means you have limited resources on the server to use. For example, the storage space will be less compared to what you get on a dedicated server.
• Not Customizable: As you have no access to the root hosting server, you have no control over software updates, security checks, or administrative tasks.

2.  VPS Hosting

Virtual Private Server (VPS) hosting emerges as a robust solution for websites that have outgrown the confines of shared hosting, offering a blend of shared hosting’s affordability and the comprehensive control and resources of a dedicated server.

VPS hosting operates on a principle that divides a single physical server into multiple virtual servers. Each virtual server acts as an independent server environment, providing users with dedicated resources and the ability to customize their hosting environment to their specific needs.

This setup makes VPS hosting particularly suited for medium-sized businesses, e-commerce websites, and high-traffic blogs.

Source: GoodFirms

Here are the key features of VPS hosting:

1. Dedicated Resources

Unlike shared hosting, where resources are divided among all sites on a server, VPS hosting allocates a set amount of resources exclusively to your website.

This means your site has access to its own CPU, RAM, and disk space, ensuring that your website’s performance is not impacted by the demands of other websites on the same server.

The dedicated resources in VPS hosting allow for more consistent performance and the ability to handle spikes in traffic more gracefully.

2. Scalability

VPS hosting is highly scalable. As your website grows, you can easily increase your server resources (such as CPU, RAM, and disk space) to accommodate this growth.

This scalability makes VPS hosting an ideal choice for websites that are expanding or have variable traffic, providing a balance between the affordability of shared hosting and the power of dedicated servers.

3. Control and Customization

VPS hosting offers a high degree of control over your server environment. Users have root access to their virtual servers, allowing them to install custom software, configure settings, and make adjustments to their hosting environment as needed.

This level of control is a significant step up from shared hosting, where users are limited to the configurations and software provided by the hosting provider.

Positives of VPS Hosting

• Performance is unaffected: Though multiple websites use the physical machine, the performance of those sites does not affect your virtual server.
• Cost-effective: Compared to a dedicated hosting service, VPS is cost-effective. For a small business, the starting price for a dedicated hosting service is $100 per month. But a VPS service costs between $25 and $100 per month.
• Better performance: With control over software, guaranteed server resources, and customization, VPS hosting performs better than shared hosting.

Negatives of VPS Hosting

• Technical know-how: Operating VPS hosting requires technical knowledge like server setup, software installation, security configuration, etc. For example, a faulty server setup can put your website at security risk. Thus, it is unsuitable for individuals or businesses with no technical know-how.
• Expensive: VPS hosting services are pricey compared to shared hosting. If you are just starting to build a website, VPS hosting is unsuitable.

Here’s a quick comparison recap to help you make the decision:

Other Hosting Types to Check Out

There are some other hosting options, depending on your budget and technical requirements.

1. Dedicated Hosting 

In this type of hosting, you can use an entire physical server. You will have complete control over the physical environment, the types of software to install, and a highly secure hosting solution.

But this hosting comes at a hefty price. This hosting type is suitable for large enterprises that require dedicated hardware for specific requirements or regulatory reasons.

2. Managed WordPress Hosting 

According to W3Techs, 43.2% of websites on the Internet are powered by WordPress. Thus, service providers offer dedicated WordPress hosting services.

Managed WordPress hosting provides an optimised server for hosting a WordPress site.

In this type of hosting, the service provider takes care of the software updates, backups, security patches, and other underlying physical infrastructure, allowing you to focus on building the website.

3. Cloud Hosting

Unlike the other hosting types that use a single piece of physical hardware for hosting, cloud hosting uses a network of virtual and physical servers for hosting websites or applications.

The main advantages of this setup are scalability and flexibility. With cloud hosting, a website’s content is spread over various servers and across regions. Any increase in your site’s demand can easily be met by one server or another, making scalability a nonissue.

Marketing Expert in Domain Hosting Industry

Vaibhav Srivastava
Senior Director – Marketing, NewFold Digital

I’m trying to add my perspective on WHY VPS (Virtual Private Server) hosting may be preferable than to a Dedicated Server hosting when you are just starting up your business.

Cost-effectiveness: VPS hosting is comparably a cost-effective solution making it a more budget-friendly option for startups with limited resources. Thought you get access to dedicated resources such as CPU, RAM, and disk space which is up to your requirement and at a fraction of the cost of a dedicated server.

Scalability: VPS hosting offers greater scalability due to its virtualized environment. As your business grows you can easily upgrade to accommodate higher resource demands.

Reliability: This applies to both VPS and Dedicated Servers. Since these hosting environments are isolated from other users, you are less likely to experience performance issues or downtime caused by sharing.

Management: Managed VPS hosting providers handle server monitoring, security updates, and technical support, freeing up your time and resources.

Crux: In the initial days of your business you do not want to assume very high upfront cost. Especially considering that you are just starting our with limited resources. VPS gives you that leverage with flexibility.

The Big Question: Which Hosting Type to Choose?

While the parameters of shared and VPS hosting give you a fair idea about both hosting types, the answer to the big question—which to choose?—depends on answering the following questions:

How Much Are You Willing to Spend?

The choice of a hosting service comes down to how much you can pay. Shared hosting is the best choice if you are a beginner with a small budget. As your website grows, you can upgrade the plan to suit your requirements at any time.

VPS hosting is ideal for professionals and businesses with no budget restrictions, and if you are a person who seeks value over cost, VPS is for you.

The hosting type offers performance, scalability, and security and is very reliable. Hence, the higher price is justifiable.

What Is The Nature Of Your Business? 

Shared hosting is suitable for the following:

• Personal websites
• Blogging sites
• Small and medium businesses with low to medium traffic
• Startups
• eCommerce sites with less than 500 visits per day

If you are a business expecting low to medium traffic and not very concerned about site performance, choose shared hosting. Or, if you want your site to be up and running quickly, prefer shared hosting.

The default server settings and preconfigured resources will get you going immediately. VPS hosting is for those businesses whose needs grow beyond shared hosting but do not require a dedicated server.

It perfectly suits any eCommerce business, eLearning website, and online marketplace. Also, gaming enterprises can use VPS to run gaming servers.

Will You Use a Lot of Resources?

Do you use a lot of image or video content on your website? Or run many applications on the server? Or are you a web developer and need to host multiple domains?

If your intended purpose requires dedicated server resources, the best choice is VPS hosting. Despite its accessibility and affordability, shared hosting has limited resources.

You will get limited storage, computing power, and bandwidth. With VPS, you can scale up server resources whenever you need them.

There will be zero-to-minimal fluctuations in resource availability with VPS hosting, ensuring smooth operation.

With VPS hosting, you will get one dedicated IP address and can attach as many IP addresses as you want to the VPS. The large bandwidth of VPS allows you to handle traffic surges without hiccups.

Also, RAM between 3 and 4 GB is suitable for handling high traffic.

Can You Manage the Server by Yourself?

Shared hosting is straightforward, and anyone without technical understanding can use it easily. But without root access to the server, you can do nothing about server management with shared hosting. You lack control.

On the other hand, VPS hosting allows you to manage the server as you like. It gives complete control over server management. But you need to have good technical knowledge for this.

If you have an IT team for the purpose, it is well and good. Even if you do not have a team or possess minimal technical knowledge to manage a server, do not worry.

Many hosting service providers offer semi-managed and fully managed VPS hosting services. In a semi-managed VPS, the service providers carry out limited maintenance.

They initiate hardware configuration and management. Users must conduct the installation of software, security patches, and other maintenance work.

In fully managed VPS hosting, an expert team from the hosting provider will completely manage your server.

From server configuration to application installation and backup management, the team manages everything, leaving you to focus on your business.

How Does Your Website Grow?

The pace of your website’s growth determines the hosting choice. If you want to take a gradual approach, begin with shared hosting. It can handle minimal traffic and low-resource websites well.

If you think your website can grow rapidly, choose VPS hosting. The high bandwidth and disk space of VPS can handle high traffic.

It provides enhanced security features like firewall protection, data backup, server log monitoring, malware scanners, DDoS defence, disk encryption, etc. With VPS hosting, there are minimal server errors.

You can create a resource-rich website without worrying about page loading time affecting your business.

Does Web Hosting Impact SEO?

There is a direct link between Search Engine Optimization (SEO) and web hosting. If you want your website to be visible to more people, you must rank higher in the search engine results.

SEO is the digital marketing technique that helps with this. The impact of hosting on SEO is huge. According to Portent, an eCommerce site that loads in 1 second has a 2.5x conversion rate compared to a site that loads in 5 seconds.

Invariably, your server plays a role in page load time. If the server is often unresponsive or slow to load, it impacts the site’s SEO, leading to people leaving your site.

The server’s uptime is another factor that impacts SEO. Uptime is the amount of time the server is accessible online. It is essential because search engines do not index inaccessible websites and thus affect a website’s ranking.

But a good web host can boost uptime. Most hosting providers offer 99.9% uptime.

VPS hosting, due to its high-end hardware, superior security measures, zero interference from other hosts, regular server software patches, and the ability to handle high loads, offers 99.99% uptime.

Choosing VPS will inevitably boost your SEO.

Choose The Right Hosting Plan 

Both shared and VPS hosting have their fair share of differences. In the end, what it is you need from a hosting service determines the choice. While shared hosting is affordable, VPS is a bit pricey.

When looking into performance and scalability, VPS is the best choice. If server administration is a hassle, shared hosting is preferable. VPS is best if you prefer complete control over server administration.

Make sure you also consider the hosting plans providers offer when choosing a hosting type.

Consider the amount of disk space, CPU, RAM capacity, bandwidth, and customer support hosting providers are offering. For VPS hosting, you can choose between managed and self-managed plans.

Whether you are starting into web hosting or a professional who requires assistance, head over to BigRock for assistance. With advanced features and comprehensive hosting plans, BigRock stands out as a reliable hosting provider.