Posted by Matt Edgley on 18-Apr-2017 10:53:49

Cloud vs dedicated server hosting: What's best for a small business?

Cloud vs dedicated server hosting: What's best for your small business?

If you’re the owner or technical director of a growing digital business, there's a good chance you’ll eventually find yourself in a position where you need to upgrade from basic shared hosting to a more premium hosting package.

In circumstances like this, the choice is genrally between cloud server hosting and dedicated server hosting (maybe even a blend of both – but that’s a discussion for another time).

Your decision will depend on a mixture of things, including your business objectives and what each platform can do to meet them. However, there are some things that almost every small business values: scalability, cost, resilience and security. We explore these in detail here. (You can also click here to see a quick side-by-side comparison.)

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Quick definitions

  • If you choose to rent a dedicated server, you will be given exclusive access to an individual physical server within a third-party data centre.
  • If you opt for the cloud, you will be allocated a set of resources (processing power and storage) from a pool of virtualised hardware.


If you’re a startup or a SME, you’ll likely want the hosting option that gives you the most freedom and flexibility. As your business grows, so will your demand for resources and capacity. In this instance, cloud server hosting would be your better option as it allows you to quickly scale up or down your infrastructure with very little notice.

Dedicated server hosting, in comparison, is much less scalable since you’re tied down to physical rather than virtual devices – and very likely, longer-term contract commitments. Need more storage space or computing power? Then you’ll need either to upgrade your server or buy another and double your spend.

With cloud, on the other hand, it’s simple and convenient to add virtual resources as and when you need them. Should you need it, you can look beyond an individual cloud server and run an entire data centre in the cloud for maximum flexibility and efficiency: divvy up your resources between as many servers as you see fit to meet your changing requirement.


Most cloud hosting providers will give you the option of paying by the hour or month according to the resources that you use. As such, it may be more cost-effective than dedicated server hosting, where you’ll be forced to estimate the capacity you’ll need at your busiest times and then invest in a server that can meet this. However, some providers may be able to give you a better deal on a long-term dedicated server lease than on a cloud server.

For more information, take a look at our recent blog: Cloud hosting: 3 hidden costs to consider.


One of the fundamental differences between physical and cloud hosting is that of the reliance on one piece of hardware versus the comparative safety of sharing the risk among many. If you choose the dedicated server route, a large degree of your uptime is dependent upon a single server.

This is something that can be mitigated against in the dedicated server world – some providers may offer “hot spare” hardware to migrate to in the event of failure, or you may choose double your costs and share the risk between two servers.

However, this concept of a single point failure is reduced markedly for those who opt for the cloud, for the simple fact that your virtual environment can draw upon resources from a wider pool of underlying hardware.

Find out more: Dedicated vs cloud server hosting: Which is most resilient?


In some industries, the use of a single-tenant environment may be deemed necessary from a security and compliance perspective. This means opting for a dedicated server rather than cloud server hosting – although if this applies to you, it’s worth remembering that any server is only as secure as the data centre it lives in.

Dedicated server

Cloud server

Physical infrastructure

Virtual infrastructure

Single-tenant environment

Multi-tenant environment

Difficult to scale up and down

Easy to scale up and down

Fixed monthly fee per server (although you may be able to get a better deal on a long-term lease)

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Depending on your deployment can range from a fixed monthly fee, through to Pay-as-you-go arrangements on a monthly or hourly basis.

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May offer greater compliance with security requirements

May be seen as a compliance risk depending on the provider you choose

Dependent on a single piece of hardware

Resilience is relatively higher due to ability to pull in resources from a wide pool of underlying hardware

There's no better way to find out whether a particular hosting option is suitable for your small business than to test it out yourself. Sign up with TeleData today for a FREE month trial of our cloud server hosting service.

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Topics: cloud hosting, dedicated server hosting