Shared Hosting vs VPS vs Dedicated vs Cloud Hosting: How to Choose?

February 22, 2021 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 vs cloud hosting, it may seem like a no-brainer to sign up for the cheapest option available, right?

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 provides far more “bang for your buck” by giving you the performance, security, configurability, and scalability that you need to grow your business.

Not sure what server hosting solution you need for your business? Check out the core differences between hosting types to help you make the right decision.

What Do Shared, VPS, Dedicated, and Cloud Server Hosting Mean

Before making an informed decision about what hosting type to choose, let’s first go over the definitions of shared hosting vs VPS vs dedicated vs cloud server hosting.

What Is Shared Hosting? (Bronze Tier)

Shared hosting is the 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.

What Is VPS Hosting? (Silver Tier)

Virtual Private Server (VPS) Hosting is a cross between shared hosting and dedicated hosting. A physical server (also 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 affordable scaling, better performance, and better security than shared hosting.

What Is Dedicated Server Hosting? (Gold Tier)

Dedicated Servers are exactly as the name implies: a single 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. These plans tend to be more expensive but give you the best performance, security, and flexibility.

What Is Cloud Server Hosting? (Platinum Tier)

Cloud Servers, also known as public cloud hosting, is a scalable cPanel hosting solution on an enterprise-grade cloud platform. Cloud servers launch in minutes and can scale quickly up and down as needed for traffic fluctuations or workload needs. Best of all, the servers are highly reliable with redundant hardware and high availability built-in. These plans also tend to be more expensive, but give you the best scalability, flexibility, agility, and cost-efficiency.

Each of these hosting products work in different ways. This means each will have its own strengths and weaknesses over the others.

How Do Server Hosting Solutions Compare?

Let’s compare shared hosting vs VPS vs dedicated vs cloud server hosting by a few different metrics to see how we obtained this tier structure. This evaluation applies to products from any host, not only Liquid Web.

A complete overview and comparison between shared hosting vs VPS vs Dedicated vs Cloud Hosting.

Which Hosting Has the Best 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 two seconds or less, and visitors tend to abandon a site that isn’t loaded within three 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?

Literally, a second difference in page load speeds has the potential to lose out on revenue from frustrated visitors.

How do the four products stack up against each other in terms of performance?

Low Performance – Shared Hosting

These plans generally include very limited resources, as they are granted only a fraction of the available system hardware. A shared hosting account holder can find themselves robbed of resources by other sites on the same server monopolizing the limited resources. The shared hosting tier is good for low-traffic and static websites.

Mid – High 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 over time and provides more comparable performance levels to dedicated servers.

High Performance – Dedicated Server Hosting

Dedicated servers allow direct access to the hardware and provide amazing performance for specific configurations.

High Performance – Cloud Server Hosting

Cloud Servers also grant amazing performance, especially for sites and applications prone to uneven traffic or that require resources to increase quickly.

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

Now you live in a duplex or condominium. This is more akin to VPS Hosting. 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

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.

Finally, Cloud Server Hosting is like having a house with a neighborhood playground next door that you can expand to use at any time you need. Well, not exactly, but you get the idea.

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 whether you need shared hosting vs VPS vs dedicated vs cloud:

  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 Hosting, Dedicated Hosting, or Cloud Servers.

Traffic Volume

The amount of bandwidth in and out of your server is one consideration. Inbound bandwidth is usually less important than outbound bandwidth because unless your visitors will be uploading a lot of data, inbound HTTP requests will be small in size compared to the documents and images that your site will return for each page request.

Shared hosting platforms are usually not set up for high volumes of traffic and processing since the power of the server must be distributed between dozens, or sometimes hundreds or even thousands of other users and websites. But, for average sized and trafficked sites, such as hobby sites or “pamphlet” information-only domains, or even small blogs, shared hosting is perfectly acceptable.

Sites that require more intense server-side functions, like online stores or sites which generate documents such as invoices or quotes, or sites which convert audio or video on the fly, may need more resources allocated than would come with your average shared hosting account.

Additionally, sites which have higher outbound bandwidth, like those that serve up audio or documents to users, will need additional bandwidth (and disk space) that shared hosting may not provide, and a VPS Server or Cloud Server would be better in those cases.

having a secure host and infrastructure is important

What Server Offers the Most Security?

While Risky Business was big in the 80s, business today is all about minimizing threats. When comparing shared vs VPS security, 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 of hosting 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 other common security issues. The more domain names pointed to your shared server’s IP address, the more often it is targeted for an intrusion.

High 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.

Very High Security – Dedicated Server Hosting

Because you are the only one using the dedicated server, risk of attack is minimal. There is more to selecting the right hosting product than just pricing.

Very High Security – Cloud Server Hosting

Cloud servers are proactively monitored for security threats, and since they are redundant by using virtualization across multiple servers, you can be sure your site stays online in case something does happen.

shared hosting vs vps vs dedicated offer different levels of access to the hardware

How Is Hosting Configurability?

This metric is a gauge on how much control the user has over the server and their environment on that product type. The differences between shared hosting, VPS hosting, dedicated servers, and cloud hosting vary greatly, but not so much when looking at VPS vs dedicated.

Highly Restricted – Shared Hosting

Each user is highly restricted in their own environment. Customization is limited to surface level changes such as .htaccess, PHP versions, or Specific List of Modules. There is no access to any service or server level configuration.

Mostly Unrestricted – VPS Hosting

There are very little restrictions on a VPS. Each environment is separate from the others on the server and acts exactly like a dedicated server with a few off-limit configurations. Direct access to hardware is the biggest restriction. This prevents running hardware emulation within the VPS and accessing non-network attached storage devices.

Unrestricted – Dedicated Server Hosting

Dedicated servers can be configured anyway you choose with no limitations or restrictions from the host. The user has direct access to the hardware.

Mostly Unrestricted – Cloud Server Hosting

Cloud Servers are a highly scalable cPanel solution, so the sky’s the limit for configuration within the control panel. However, there is no root access and Cloud Servers are used exclusively with Linux and cPanel.


If you need to have specific software installed, or need special configurations on your server, it could be uncommon to find a shared hosting package that includes exactly that feature set (though it is common to find hosting providers that will already have installed popular software, like FFMPEG or ImageMagick). And, it would also be unlikely that your host would install a special package for you on a shared machine, which could pose a security risk to other tenants.

A shared hosting package would have low controllability.

VPS Server, on the other hand, gives you complete access into your system, so that you can enable, disable, install, or remove any software you wish, and adjust configurations exactly to your specifications.

With VPS Hosting, you aren’t restricted to the software that your hosting provider gives to your environment.

The same can be said for dedicated servers and cloud servers, which grant complete access to the systems, so that you can install and remove software as needed. While dedicated servers give you complete control, cloud servers do not have root access for customers.

scalability differs greatly between shared hosting vs vps vs dedicated hosting

What Determines Scalability?

The scalability score measures how difficult it is to scale the product resource limits. The more difficult the scalability, the lower the score. Versatility and turn-around time also play a role in scaling, which differs between different web hosts.

Limited – Shared Hosting

Shared server packages are generally not very elastic. The user is confined to a package which allows specific limits based on bandwidth, disk usage, and other factors depending on the hosting provider. This package can be changed up or down depending on the needs and price-point, but scaling upward is limited due to division of resources among shared users, which forces migration to a new server or product type. Options for changing the resources on your package generally include increasing your disk quota, and in some cases, removing limits on your CPU access.

Mid – High – Dedicated Server Hosting

Dedicated Servers have great performance but are limited by the physical hardware and space in their chassis. Upgrades are always possible and may require significant downtime or migrations depending on the needed upgrade. Server Clustering and High Availability solutions can limit this but generally have a much larger price point.

High – VPS Hosting

VPS systems are extremely flexible in scale factors. VPSs will have more functionality available for adding or removing resources, including CPU cores, system memory, and additional disks or disk space through your hosting provider. They are only limited by the available hardware on the parent server. However, they are generally portable between like parents so they can be easily moved and upgraded with minimal downtime and turn-around time for upward scaling.

Very High – Cloud Server Hosting

By its very nature, public cloud servers can scale up and down very quickly to meet traffic and resource demands at an unprecedented rate, making them the most scalable type of hosting available. This is because cloud servers exist across multiple servers using virtualization to “glue” them together.

Resource Availability

A shared hosting package is, of course, shared amongst multiple occupants. Therefore, if you have a “noisy neighbor” who is overusing CPU time or eating up memory, then there will be less available for the remaining websites, including yours, causing them to suffer in performance.

Modern shared hosting providers will combat this by introducing resource limitations, such as maximum RAM usage, maximum number of processes, and maximum CPU percentage. These work to combat the “noisy neighbor” problem but could limit you from temporarily overusing resources to run, say, statistics, or compile your nightly order list. Being able to temporarily break these shared resource limits is called “bursting,” which is an option for some hosts.

There are “virtual dedicated” packages available at some hosts which provide all of the resources on one parent (dedicating it to your VPS) to avoid noisy neighbors but retaining the hypervisor’s scalability and management.

pricing between shared hosting vs vps vs dedicated hosting

How Does Pricing for Hosting Work?

The simplest metric that should not be overlooked when deciding which hosting platform works best for you is pricing. The costs summarized here includes monthly incurred charges and potential costs of upgrades.

Lowest – Shared Hosting

Shared Hosting packages are very low-cost due to their shared nature. Shared servers are often banking on overselling their hardware, which means more users reside on the server than a server can handle if all users were fully active. This allows small sites to be packed in around busier sites, reducing monthly costs needed to recoup the cost of the server.

Mid – VPS Hosting

VPS solutions come in many forms, from the smallest 2GB VPS, to massive 128 core machines. VPS Parent servers are often built from the very best hardware available at the time to offer the most varied amounts of configurations for users.

High – Dedicated Server Hosting

These servers will have a larger price point, in both monthly recurring fees and hardware upgrades. This is a result of paying directly for the hardware you are using and not piggy-backing off of a larger hardware set used for VPS configurations.

High – Cloud Server Hosting

Cloud servers are relatively similar in cost to dedicated servers, and this is because you are paying for access to a cluster of servers that are highly available with scaling only limited by the unused resources available at the time across the connected servers.

What Are the Differences Between Each Server?

We’ve gone over general benefits of each hosting type: shared hosting vs VPS vs dedicated vs cloud hosting. However, this doesn’t tell the whole story. Let’s get a bit deeper with some one-on-one comparisons.

What is Shared Hosting vs VPS?

Shared hosting setups are a single server environment with multiple users. As a shared hosting site owner, you make up merely one of the many other users on the same server. This model relies on locking down access and permissions to all users so they can only operate within their personal environment. However, all the libraries and software binaries are shared between users. This not only limits the software a shared hosting account is allowed to use, but opens the door for possible intrusion from other users looking to exploit the system.

On the other-hand, VPS are a completely isolated environment separate from other users on the server. This environment acts exactly like a stand-alone server. This gives the owner the freedom to install and configure any required software without interfering with, or interference from, the software installed on another VPS running on the same parent server.

What is a VPS vs Dedicated Server?

While VPS servers function similar to dedicated servers, VPS does have limits and other differences from dedicated hosting, including:

VPS Hosting

The VPS product does not have direct access to the hardware on its parent server. It is running in an emulated hardware environment which prevents certain software from functioning. For example, a VPS cannot run hardware emulation as it requires direct access to hardware and is restricted to only the parent server. You cannot emulate a VPS within a VPS.

This hardware restriction aside, there is very little software a VPS cannot run. They can even be configured to be comparable in performance to a dedicated server that has matching hardware. The big selling point for VPS is affordable scalability. Since the hardware environment is emulated, it can be modified on the fly and, in most cases, not incur any downtime. So, if the 8GB of memory on your VPS is not enough, you can easily upgrade to 16G without having to take the server offline and add the new RAM physically. Isn’t virtualization beautiful?

Dedicated Hosting

Dedicated servers can literally do anything when it comes to hosting solutions. They are what make up the backbone for all Internet hosted sites or applications. In some form or another, all software has to run on physical hardware, so there really is no limit to what can be done with dedicated servers.

You can even use a dedicated server in conjunction with other dedicated servers to setup clustered or high availability services to prevent or reduce downtime during critical hardware events.

A single dedicated server can be used as a parent server to multiple VPS servers running hardware emulation and those VPS instances can be moved between similarly configured multiple parent servers to allow for more/less hardware as needed. Dedicated servers provide total control over your hosting environment.

What is Shared Hosting vs Dedicated Hosting?

Comparing shared hosting vs dedicated server hosting is effectively identical to shared hosting vs VPS. Dedicated servers offer even more control over the environment than a VPS but inherit all the same strengths and weaknesses. Additionally, shared hosting servers are typically made from a dedicated server or cluster of dedicated servers. Inherently, dedicated servers have more ability to scale, better performance, and provide more protection from attacks. The only downside is the price point.

What is Shared Hosting vs Cloud Hosting?

While on the surface level shared hosting and cloud hosting seem similar, they are drastically different. Whereas shared hosting is shared resources on one parent server limited by the resources allocated by that host, cloud hosting is a virtualized cluster of server resources that is much higher in terms of scalability, elasticity, flexibility, and reliability.

What is VPS Hosting vs Cloud Hosting?

While VPS Hosting is highly scalable, it does require a small amount of downtime in order to upgrade resources past the parent server’s limited capacity, if the resource surge is large enough. With a Cloud Server, scalability is on-demand and happens as resources are needed with no downtime. Similarly, if there is a hardware malfunction or security issue that arises, VPS Hosting could require downtime to replace the hardware in the parent server or to patch the downed systems. With a Cloud Server, the cluster is redundant, and there is no downtime for the end users or website/application visitors, leading to a better experience.

What Are Shared vs VPS vs Dedicated Servers?

When considering shared hosting vs VPS vs dedicated server hosting, each one falls into their own niche of use cases. Their differences and their strengths compliment their intended use.

Shared Server Hosting

Shared hosting is the lowest in cost, least-configurable, least-scalable, least-secure, and lowest-performing solution. However, it works well for small businesses or individuals without much budget, students, and other users looking to get started in developing their own website.

VPS Server Hosting

VPS solutions are moderately priced in comparison to shared hosting or dedicated servers and are highly configurable and highly scalable. They come with full access to their own environment and are mostly isolated from others, which increases security while reducing potential downtime from neighbors on the same server. This makes them excellent as both production and development environments, and can house most websites and applications while still providing great performance.

Dedicated Server Hosting

Dedicated servers are premier hosting solutions. They can be set up and configured in almost any capacity to handle the needs of any website or product. Dedicated servers can be custom built and allow unlimited access to the hardware, making anything possible on your dedicated server. The hefty price tag comes with the best possible levels of performance, security, scaling, and configurability.

Managed Hosting

What Is Managed vs Unmanaged Hosting?

Now, we have compared four different hosting tiers: shared hosting, VPS hosting, dedicated hosting, and cloud hosting. However, while shared hosting is always managed (albeit without many of the services that are associated with managed plans), VPS, dedicated, and cloud hosting come in two flavors: Managed or unmanaged. This effectively doubles your options.

So, now how do you choose?

Try not to underestimate managed solutions. Most managed hosting solutions solutions come with a more robust support structure. The cheaper shared hosting plans will typically offer basic technical support, 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 secured 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. Ask yourself the following questions when determining between managed and unmanaged hosting:

  1. Am I willing to maintain software updates?
  2. Am I ready and able to research and apply security patches to patch up software vulnerabilities?
  3. Am I able to troubleshoot unexpected problems?
  4. Am I available 24/7/365 in case my website suddenly goes down?

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 server providers offer little to no effort with troubleshooting. 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.

Try Liquid Web’s VPS Hosting, Dedicated Hosting, or Cloud Hosting Solutions

When deciding between shared, VPS, dedicated hosting, and cloud 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.” It really is the case when it comes to the hosting service you choose.

Liquid Web Cloud VPS

These fully Managed VPS Servers servers come equipped with baseline optimizations built into 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.

Liquid Web Dedicated Servers

Liquid Web’s Dedicated Servers are comprised of the best hardware in the business. We are constantly bringing in new hardware, such as our Intel Xeon Servers, and retiring the old. Your dedicated servers will be built to your specifications to meet the needs of your growing application, online store, or website.

Liquid Web Cloud Server Hosting

Liquid Web’s Cloud Servers are highly scalable cPanel cloud hosting that launches in minutes and includes 24/7/365 Support and predictable monthly pricing. With resources only limited by the amount of nodes in the cluster, there’s no need to worry about downtime due to equipment failure or traffic spikes.

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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