Shared Hosting vs VPS vs Dedicated: How Do You Choose?

August 4, 2016 Jason Potter

There is more to selecting the right hosting product than just pricing.

In fact, basing your decision entirely on price is a recipe for disaster. When comparing prices on shared hosting vs VPS vs dedicated hosting, it can seem like a no-brainer to sign up for the cheapest option.

thinking about shared hosting vs vps vs dedicated

If you are running a web agency, you are not alone in thinking that shared web hosting, often as little as $5 per site monthly, is the most cost-effective solution for your business.

However, take a deeper look and you will quickly see how the financial, functional, and emotional benefits of a more robust plan from a managed hosting provider give far more bang for your buck.

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Web Hosting Product Tiers

Before we can make an informed decision, first let’s go over what is meant by these terms: Shared, VPS, and Dedicated hosting. Consider the following:

Bronze Tier - Shared Hosting

bronze medal Liquid Web - shared hostingThe most basic and cheapest of the hosting tiers. These plans allow you to rent space on a shared hosting server, which also hosts many other websites on the same server alongside your website. These plans are the cheapest solutions as they provide the least performance, security, and flexibility.

Silver Tier – Virtual Private Server (VPS) Hosting

silver medal Liquid Web - VPSVirtual Private Server (VPS) Hosting is a cross between Shared & Dedicated. A physical server, called the parent, runs several VPS instances, which are granted a strict portion of the parent server’s hardware resources. These instances are rented out and operate as independent servers from one another. So it’s essentially renting part of a dedicated server. These plans range in prices and offer easy affordable scaling and better performance or security than a shared hosting website.

Gold Tier - Dedicated Server Hosting

gold medal Liquid Web - dedicatedThe top tier of web hosting, Dedicated Servers are just what the name implies, a server dedicated to you. All the hardware that makes up the server is under your control. Dedicated servers often share network access with neighboring dedicated servers in a data center, but they share no hardware and each one is dedicated to its own customer. These plans tend to be the most expensive but give you the best performance, security, and flexibility.

As you can see each of these hosting products work in different ways. This means each will have its own strengths and weaknesses over the others. So let us compare Shared Hosting vs VPS vs Dedicated by a few different metrics to see how we obtained this tier structure.

Performance

Performance matters. If you want to keep your clients happy, you need to provide them with top-notch performance. A survey conducted by Kissmetrics discovered that nearly half of web users expect a site to load in 2 seconds or less, and they tend to abandon a site that isn’t loaded within 3 seconds.

Furthermore, 79% of web shoppers who have trouble with website performance say they won’t return to the site to buy again and around 44% of them would tell a friend if they had a poor experience shopping online. The bottom line here?

It takes only a literal second of difference from slow page loads to lose out many potential or even perpetual sales.

Poor Performance - Shared Hosting

These plans generally include very limited resources as they are granted only a fraction of the available system hardware. They can find themselves robbed of resources by other sites on the same server monopolizing them. The Shared Hosting tier is good for low traffic and static websites.

Good Performance - VPS Hosting

VPS plans are limited by the available hardware assigned to the plan. There is a performance tax on the hardware when running in a visualized setup. However, this tax has become smaller and smaller over time allow more comparable performance levels to Dedicated Servers.

Great Performance - Dedicated Server Hosting

Direct access to the hardware provides the best possible performance configurations with a dedicated server.

Visualize Performance: The House Party Analogy

Let us consider shared hosting like your first apartment. It’s in a shared building with shared entrances, hallways, etc... Hosting a house party in your small two bedroom apartment is very confined. You can easily invite too many people and start flooding the hallways with people and noise that will surely displease the other tenants in the building. The same holds true in reverse. If your neighbor throws a house party, you could be impacted by the ruckus. Your apartment works well, as long as you and the other tenants in your building respect one another and behave.

apartment are like shared hosting

Continuing the analogy, but now you live in a duplex or condominium. This is more akin to VPS Hosting now. You and your neighbors have more space and share less common areas. You or your neighbor can now throw a larger party than could be done effectively at your apartment. However, there are still limits and you still do have shared common areas such as parking. Your visitors will likely impact your neighbors, just to a lesser extent. But you do have more freedom in this space and your neighbor is less likely to be bothered by your party.

dedicated is like owning your own home

Closing out the analogy, we have the true house party. Dedicated hosting is like having your own house, complete with a big yard and extensive driveway. This provides plenty of parking for your friends and little chance that you or your neighbor's party will get out of control affecting one another adversely.

As you can see from the analogy, as your party grows in size, it’s better accommodated and tolerated the further up the hosting tier you go. The party in the analogy is your site traffic.

The larger your traffic and number of visitors, the further up the tier you will need to go in order to accommodate the demands of your traffic.

Consider these questions as you pinpoint your business’s hosting needs:

  1. Will your clients’ sites have heavy or highly variable traffic?
  2. Do you need to minimize downtime or guarantee high availability?
  3. Do you want control over your server and its performance?

If none of these issues sound important to you, you might be fine on a shared hosting plan. If you answered “yes” to any of the above, consider VPS or Dedicated Hosting.

Security

While Risky Business was big in the ‘80’s, business today is all about minimizing threats. When comparing shared hosting vs VPS vs dedicated servers, the differences become clear very quickly.
Can you afford the risk of a client’s site being hacked? As a business owner, in addition to the costs of downtime and repairs for a client’s site going down, your reputation is also impacted, which is a much more serious and permanent problem.

Consider the following security summary for each type before you decide what is right for your clients.

Low Security - Shared Hosting

The activities of other sites on the server can affect your clients’ sites, putting them at risk of viruses, hacking and blacklisting. The more domain names pointed to your shared server’s IP address, the more often it is targeted for an intrusion.

Good Security - VPS Hosting

Each user occupies their own space, isolated from their neighbors with independent IP addresses. Rarely, a virus may bypass the hypervisor, which could leave all sites on the VPS server vulnerable.

Best Security - Dedicated Server Hosting

Because you are the only one using the dedicated server, risk of attack or outage is minimal, especially compared to the other hosting tiers.

Managed vs. Unmanaged

Now we have compared three different hosting tiers: shared hosting vs VPS vs dedicated hosting. But, there are actually five options here for you to choose from.

While shared hosting is always managed (albeit without many of the services that are associated with managed plans), VPS and dedicated hosting come in two flavors: Managed or Unmanaged. This effectively doubles your options.

So now how do you choose?

Managed Hosting

Try not to underestimate managed solutions. Most Managed Hosting solutions come with a more robust support structure. The cheaper Shared Hosting plans will typically offer basic technical support to get you back online, but not much above and beyond that. There is immense value in having access to a full team of experts, like the Most Helpful Humans In Hosting™, who have specifically tuned your server for the idiosyncrasies of hosting and securing your clients’ websites.

The decision between managed and unmanaged hosting will come down to how much work you are willing or able to put into managing your own servers. Maintaining software updates, security patches, troubleshooting unexpected problems are just some parts of managing your own server.

If this is an undertaking you are incapable of handling or don’t have the staff on hand to keep up with your growth, then Managed Hosting is certainly right for you.

Unmanaged Hosting - A Cold Shoulder

It varies by provider, but in most cases, unmanaged servers offer little to no effort from your provider. They will typically help with things that are out of the server's control, like network, hardware, and power problems. But you’ll be on your own when it comes to configuration, optimization, routine maintenance, and more.

Managed Hosting - The Friend Next Door

Providers offer a myriad of helpful services to their managed customers in addition to those that an unmanaged customer would expect. They can render easy assistance by providing base configurations for your site or application. You can even get assistance with the day-to-day sysadmin tasks like migrations, scaling, backups, disaster recovery, monitoring, updates, and maintenance.

Begin with the End in Mind

In the end, when deciding between shared vs VPS vs dedicated hosting, make sure you select a hosting provider that will not only meet your needs today but also be able to accommodate your needs into the future. While it is easy to see that shared hosting is a cheaper solution, it can also get much more expensive for web agencies in the long run.

Try and remember the old adage: “You get what you pay for.” as it really is the case when it comes to the hosting service you choose.

Cloud VPS

Our Fully Managed Cloud VPS servers come equipped with baseline optimizations built-in to their template. When you select any of our fully managed server images, you can rest assured that it can handle itself from the moment it spins up. This makes it faster and easier than ever to get up and running on our Cloud infrastructure.
Let us take care of the hardware maintenance, so you don’t have to worry.

Dedicated Servers

Liquid Web Dedicated Servers are comprised of the best hardware in the business. We are constantly bringing in new hardware and retiring the old. Your dedicated servers will be built to your specifications and we even provide hardware refreshes if your system is becoming dated.

Try Liquid Web’s Cloud VPS or Dedicated Solutions

We are hands down the Most Helpful Humans In Hosting™ for a reason. You will not find a better support team who will go the extra mile or ten to keep you up and running. Try our VPS or Dedicated Server options to stay secure while keep your server optimized for speed.

About the Author

Jason Potter

A veteran of the IT Support field, I have more than a decade of experience in systems administration, web hosting, and cPanel servers. I enjoy writing and providing complicated technical concepts in layman terms. On my free time, I enjoy playing several types video games, automation scripting and just living life with my wife and two kids.

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