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Cloud Server vs Dedicated Server: Which Is Best for Your Business?

on January 11, 2021


When it comes to the support of today’s business IT needs, a server acts as the beating heart of your tech infrastructure.

Identifying the right solution for your needs can save money, improve scalability and flexibility, increase efficiencies, guide effective resource utilisation, and positively impact business outcomes.

Traditionally there have been two basic types of server to consider – the dedicated on-site option, and the cloud-based alternative.

Each has a place in the modern business world. But how do you know which is right for you? Fundamentally, when making the decision between a physical or cloud-hosted server, matching the needs of your business (today and in the future) with the ideal configuration is vital. You need to be confident that your solution will best support your operations, have the necessary scalability, and make sense from a cost perspective.

A bit of background …

Put simply, the cloud is a virtualised hosting platform. It is a space in which limitless virtual servers can be created to store information. The cloud draws resources from dedicated hubs strategically located around the world, which basically operate as data centres filled with physical servers.

A dedicated server, meanwhile, is a physical piece of hardware, with capabilities and limitations that impact things like performance and reliability. Most commonly, a dedicated physical server is housed on-site and used to host information for a single business or client, which would typically rent or buy the hardware.

What do these two options have in common?

Both have inherent advantages and disadvantages, and the ideal choice for any business varies greatly depending on a number of factors. These can range from the size of the business, to the nature and location of the workforce, available budget, and the vision for the future (for instance, are you anticipating a period of rapid expansion?)

Both server solutions are designed to perform similar functions, namely:

  • the storage and back-up of information
  • receiving and processing requests for access to information
  • providing fast and dependable user access to the requested information

As technologies continue to evolve and increase in sophistication, both cloud hosting solutions and dedicated servers have the general capabilities necessary to support any type of enterprise. They can be managed, monitored and maintained using similar back-end tools, and can be operated using similar software.

Another similarity is the ability to offer pretty seamless migration with existing and legacy company infrastructure, although migration involving a dedicated on-site server tends to require more detailed planning to avoid disruptions and downtime.

Despite these similarities, the differences between the two options become clear when comparing factors including scalability, performance, operations and pricing.

Comparing the advantages and disadvantages

A virtual cloud-based server can be established in mere seconds, and shut down just as quickly. No significant up-front investment in hardware or other physical resources is required to make this happen, which offers an advantage for businesses aiming to avoid any hefty initial expenditures.

Sending information to a virtual server for storage is an easy process too, requiring no significant modifications to the existing hardware or equipment used by a business. And moving forward, cloud server storage can easily be expanded or reduced, with zero downtime incurred.

It’s this ease of set-up and flexibility that’s often held up as one of, if not the, primary advantage associated with cloud hosting.

Your cloud service handles all the processes that control where your information lives and how it is used and stored, so you and your team don’t need to give it any thought. Backups are automatic, with copies of your information spread intuitively across the multiple physical pieces of equipment that support the cloud infrastructure. 

Physical on-site servers meanwhile are powerful and fully customisable, designed to perform the specific tasks your business needs, with ultimate effectiveness. Although expensive, this option means you will enjoy exclusive use of your server, and more reliable access to critical business information. It can be configured to your exact specifications, whether that be speed, space, memory, or any other considerations needed to decide what’s best for your business.

It’s also important to keep in mind that while cloud servers usually incur a lower set-up cost than their physical counterparts, this advantage can diminish or even disappear entirely over time, once a company starts to scale up and demand extra resources from their cloud service. 

Then there’s the speed factor. When it comes to performance, dedicated servers offer fast processing and retrieval of information, by processing data locally and avoiding any lag in the performance of these functions. And because they only service a single client, it would be unusual for requests or actions to end up sitting in a queue.

Conversely, requests or actions that go through cloud servers need to navigate several layers of infrastructure to perform similar functions. With many clients competing to use the same service, there is always the risk of bandwidth becoming maxed out, with system overloads resulting in a negative user experience, including delays when accessing business critical applications and information. This is considered one of the most significant drawbacks of using a solely cloud-based server.

Of course, physical hardware also has its limitations. Systems can be upgraded with extra capabilities, but these tend to require modifications to the infrastructure itself, can be complex and expensive to configure, and the process is likely to result in significant (and potentially costly) downtime.

Dedicated on-site servers also require an added level of maintenance not demanded by the cloud. The user needs to ensure adequate, ongoing monitoring, and will need access to in-house or external expertise when it comes to systems administration and load profile to effectively maintain data storage requirements.

The best of both worlds?

Every business varies greatly in its IT needs. Any decent external IT service provider should be able to work with you to identify and evaluate your priorities, and help determine the most appropriate solution, while remaining within any budgetary constraints that may exist.

The good news is you don’t have to make a straight choice between these two distinct options. Some companies, for instance, opt to establish a private cloud, owned by the organisation, and accessible only to staff and other authorised stakeholders. While helping to solve any issues around speed, this solution holds extra advantages for businesses that require more control over their networks and data storage. 

Beyond this, an increasing number of businesses are looking to various types of hybrid option. These might incorporate different combinations of dedicated, public and private cloud server features, allowing for a highly-customised solution that meets the distinct needs of a business, by handpicking the most advantageous elements.

A popular choice is the cloud-based dedicated server, which gives you all the processing power of a physical server, the difference being it is typically housed in an externally managed, co-located data centre, rather than on-site at your business premises. As its sole user, your hardware and its resources remain entirely at your disposal, meaning no competition for bandwidth. At the same time, the addition of a virtualised element ensures extra benefits associated with the cloud are made available to you through the same set-up.

Essentially the limitations of a single, on-site dedicated server or an entirely cloud-based solution can be overcome by using this powerful combination of physical, expertly managed hardware, and the cloud environment.

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