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Dedicated Servers vs. Shared Hosting: Which is Best for Small Business App Hosting?

A business that relies on self-hosted applications needs a hosting platform. There are many hosting platforms to choose from: dedicated servers, cloud servers, virtual private servers, Hybrid servers, platform as a service, and shared hosting are just a few of the options. If we were to list these options from least to most powerful, shared hosting would be at one end of the spectrum and dedicated servers would be at the other.

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You might think that dedicated servers and shared hosting serve distinct markets because they are so different. But comparing the two is worthwhile for a couple of reasons.

First, many businesses choose shared hosting only to discover it doesn't meet their application hosting needs, subsequently upgrading and consolidating their apps on a dedicated server.

Second, a dedicated server fulfils all of the hosting requirements of many small businesses, including website and ecommerce hosting, email, database hosting, hosting for internal apps and services, data storage, and more.

What is Shared Hosting?

Shared hosting uses one physical or virtual server to host the sites and apps of many different users. The server's resources are shared between those users with potentially thousands of applications. Because lots of users share the resources of the server and therefore the cost, shared hosting is inexpensive.

It's worth emphasizing that shared hosting doesn't use virtualization software to give each client a virtual machine. Shared hosting is not cloud hosting or a virtual private server.

Traditional shared hosting relies on the multi-user features of the operating system—almost always a Linux distribution such as CentOS—to maintain the separation between hosting accounts. More modern shared hosting may use an operating system such as CloudLinux for improved security and resource management.

Shared hosting accounts are controlled via a control panel such as cPanel, and they may include additional services like email inboxes and automatic app installation.

What is a Dedicated Server?

A dedicated server is a physical server with an always-on internet connection. Whereas shared hosting splits a server between lots of users, a dedicated server "dedicates" the whole machine to one user; it is single-tenant hosting whereas shared hosting is multi-tenant.

The physical server has similar components to any other computer, although rack-mounted servers look a little different. It has one or more processors, RAM, one or more storage devices, and a network interface. Unlike consumer machines, dedicated servers are equipped with enterprise-grade hardware such as ECC RAM for increased reliability. 

Dedicated servers range from moderately powerful to extremely powerful, depending on the specifications. At the top-end of the range, dedicated servers are the most potent single-machine hosting option available—the only type of hosting more powerful combines multiple dedicated servers.

Dedicated Server vs. Shared Hosting: Pros and Cons

Small businesses consider multiple factors when choosing hosting: cost, ease of use, the capabilities of the platform, security, and so on. Let's see how shared hosting and dedicated hosting compare.

Shared Hosting Pros

Shared hosting is cheap

It is possible to find managed shared hosting that costs only a couple of dollars a month. Shared hosting providers spread the cost of the server and bandwidth over many different users, so each user pays a small portion of the total.

Shared hosting is easy to manage

Shared hosting offers little in the way of configuration options at the operating-system level. Users don't have to manage the server or its operating system, but they do have to manage their own site or application.

Shared hosting is designed for common hosting scenarios

Most shared hosting clients want to install a CMS like WordPress or an ecommerce store like Magento. A shared hosting provider configures their platform to make that as easy as possible and often provides automatic installation of the most popular apps.

Shared Hosting Cons

Limited performance

A shared hosting server may well host hundreds or thousands of websites—that is why it is so cheap. The performance of shared hosting is acceptable for a personal blog that receives a handful of visits a day, but a busy site or ecommerce store runs into resource limitations quickly, resulting in poor performance and negative user experiences. Apps with a growing number of users often need to be moved to a more powerful hosting platform.

Resource contention

The resources of a shared hosting platform are shared, which means apps compete for resources. If an application consumes excessive bandwidth or memory, fewer resources are available to neighboring apps and there is nothing that users can do about it. Furthermore, if yours is the app that causes significant performance issues for other users, many shared hosting platforms will simply remove it from their platform.

Lack of flexibility

Shared hosting is engineered for the most common use cases. It cannot accommodate unusual hosting scenarios, and clients are forced to work within the constraints of the platform rather than adapting the platform to their needs.

Lack of control

Shared hosting users have no insight into or control over the operating system or the software that runs on it. They can't patch out-of-date software except for the software they host. They have no control over how the server is managed. Shared hosting users put a lot of trust in their hosting provider.

Lack of scalability

If an app runs up against resource limitations, the only solution may be to migrate to another hosting platform. Shared hosting plans do have some limited potential to scale, but a growing app hits hard resource limits beyond which shared hosting cannot grow.

Dedicated Server Pros

A custom hosting solution

Dedicated servers from ServerMania are custom built for each client. You choose the hardware from an extensive range of processor, memory, storage, and networking options. You choose the operating system from a selection that includes multiple Linux distributions, Microsoft Windows, or a custom OS.

Peak performance

Resources are entirely at the disposal of your apps. Performance can't be degraded because another client's app consumes too many resources, and your apps can use every resource that you pay for.

Scalability

Dedicated servers can be configured with specifications that span a wide range of capabilities. For moderately busy applications, our dedicated server range begins from 4-core machines with 32 GB of RAM. For businesses with the most active web sites, ecommerce stores, and apps, our range extends to extremely powerful dual-processor machines with 44 cores and 512 GB of RAM or more.

Dedicated Server Cons

Dedicated servers are more expensive than shared hosting

Dedicated servers cost more to lease than a shared hosting plan, primarily because even a low-end dedicated server is far more powerful than shared hosting.

However, the cost of dedicated servers compares favorably to other hosting modalities over the course of their life. Dedicated servers are often less expensive than cloud servers and shared hosting when their relative capabilities are taken into account.

Dedicated servers require some technical knowledge

Because a dedicated server provides a complete operating system environment, users are expected to have some experience of managing a Windows or Linux server. Dedicated servers are highly configurable, which adds some complexity. However, small businesses that prefer not to manage their server can opt for a Server Management Plan and have our engineers take care of their server.

In Conclusion

Shared hosting is suitable for small businesses looking to host a single low-traffic blog or a web app with a handful of users. But, if your small business is in any of these categories, dedicated server hosting is the better choice:

  • You have complex hosting requirements that need a hosting environment with a custom configuration that you control.
  • You need to host multiple apps and services.
  • You want to choose the technology used to build your applications, including the programming language, frameworks, library versions, and more.
  • Your apps have many users or have large bandwidth, computation, or storage requirements.
  • You require a single-tenant hosting environment for reasons of privacy, security, or regulatory compliance. If your app requires HIPAA compliance, for example, shared hosting is not suitable.
  • You would like to take advantage of the capabilities of a bare metal dedicated server to run your apps in virtual machines or containers.

While shared hosting has some uses, it is less flexible, less robust, and less scalable than dedicated server hosting. Choose dedicated hosting for a platform that will grow with your business and adapt as the needs of your small business evolve.

ServerMania hosts custom dedicated servers in eight data centers around the world, including in the U.S., Canada, Europe, and New Zealand. To talk to our advisors about the best hosting for your small business, get in touch today by phone or email or start a live chat conversation on this page for a free initial consultation.

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