As a Small Business, Do I Need VPS or Cloud?

Expert Jack Bedell-Pearce explores the differences between VPS and cloud hosting so you can make the right decision for your small business

As a Small Business, Do I Need VPS or Cloud?

A virtual private server (VPS) and cloud hosting (in its many guises) have a lot of similarities, so which you opt for depends on your company’s needs. Do you just want to host a few applications, or do you want to run a large e-commerce website?

What is a VPS?

Most servers that have one purpose (or dedicated servers as we call them) are woefully underutilised. For example, an Exchange Server which exclusively looks after email may work at 60% capacity during the working week but the rest of the time it’s idling at closer to 20%. By installing ‘virtualisation software’, it’s possible to trick a single physical server into working like multiple machines. This can turn an expensive single dedicated server into many virtual private servers which can share the physical resources of the former much more efficiently.

A VPS also has the advantage of being scalable. Most companies start off with a small database which grows over time. As the memory, processing speed and disk space demands of a database increase, it is possible to virtually ‘upgrade’ your VPS on the fly.

Buying and setting up a VPS from scratch though is even more expensive than a dedicated server, which is why you can buy a ‘hosted VPS’.

The best part is that on a hosted VPS you have administrative/root access and you can store/host what you like on it; no-one else has access to it. The main benefits are boasted flexibility, control, security and resiliency as the VPS should have failover capabilities.

Typically, VPSs are used for non-resource intensive applications, such as accounting programs, intranets and CRM databases, that won’t run in a shared environment as they require administrator access to configure. VPSs are also excellent at hosting complex, or high traffic websites.

When looking at VPS hosting providers consider:

Access and security – A VPS should include full root or administrator access which gives you total control over the server. As the VPS is also a private environment, you will have greater security than in a shared hosting/cloud environment.

Complete remote control – You should be able to stop, start or even reinstall your VPS with the click of a button, meaning you can instantly restore the server to its original state, as well as take instant backups that can be restored at any time.

Cost – VPS are charged on a monthly basis with discounts for annual or biennial contracts. Resources can be added to the VPS, but it is not ’on-demand’, which means the VPS can’t automatically burst (i.e. use more RAM to meet an increase in website traffic) resources like you can with cloud hosting. However, the bill will be a set amount every month, and for some this is worth more than having the flexibility that the cloud can offer.

Cloud hosting

Cloud hosting provides similar functionality to VPS but the main difference is that resources can be provisioned on-demand. The most common cloud hosting is Infrastructure-as-a-Service (IaaS) made up of many virtualised machines that can share the same underlying resources. Cloud hosting can also scale based on your resource usage and offer utility-style billing on a per hour basis.

Some things to consider when buying a hosted cloud solution include:

Cost – Cloud hosting is typically based around a utility model which means that it will be billed on a per hour basis for the resources used (like energy bills), and without needing to reserve additional resources in case of future need.

The ability to have limitless resources at your fingertips often comes at a price. It may seem cheap to be charged a few pence an hour, but running 24/7 it quickly adds up. Typically, you could be paying twice as much as a monthly VPS fee.

Scalability – Cloud hosting scalability is based on having resources distributed across multiple servers, allowing continuous availability and flexibility for peaks in demand. However, the user can sometimes have no control over where data is stored, especially where the provider has several storage locations, which could include units overseas.

Security – Cloud is advancing on the security front but there are still concerns over putting sensitive or private data on a public cloud. Private clouds however, can guarantee high level security, but will be more expensive as they require hardware dedicated to that cloud.

At the end of the day the choice between VPS and cloud platforms depends on your business needs; it may well be that you opt for a mixture to get the right blend of flexibility, security and cost.

Tips for SMEs

  • Take advantage of ‘Software as a Service’ (SaaS) cloud solutions for accounting, CRM and other office applications – it is probably the most flexible and cost effective way of starting a business on a small budget.
  • Use a web host or VPS for hosting custom applications and websites. This will give you most control over your site at a predictable monthly cost.
  • If you are concerned about data security, keep all customer information on a VPS and details about prospects on a cloud application.
  • Always research your hosting provider and find out ‘where’ their VPS / cloud environments are physically located. If you can’t find this information easily then there’s a good chance they’re using the cheapest/least reliable data centres (and probably not in the UK).

Jack Bedell-Pearce is the Managing Director of 4D Hosting

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