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Shared vs VPS Hosting – What’s the Difference?

Choosing the right host is no easy task. Feeling overwhelmed, confused and a bit lost are perfectly normal reactions when faced with having to decide the right level of service. Even with considerable experience, it can be difficult to choose between the overwhelming number of options out there.

In this article, I’ll take a look at shared hosting (a natural starting point for small websites) and VPS (Virtual Private Server) hosting — then finish up with a few recommendations for each type of service.

In essence, Virtual Private Servers are a significant step up from general shared hosting plans — with costs ranging from as little as $5 a month on the low end to $20 to $55 for a decent mid-range VPS service. Is the additional cost justified?

Let’s take a look…

Shared Hosting

Shared hosting is a way for hosting companies to put a large number of users on the same server. A server is nothing more than a computer with a processor, memory and a hard drive — just like your own home computer. If you ever grew up in a household with a single computer used by the whole family, then you’re probably already familiar with some of the upsides and downsides of shared hosting.

On the upside, the cost-per-user is low. If you buy everyone in the family a computer, it will likely cost around $300 per person. However, if you all use a single computer, between, say, six of you, the cost may be as little as $50 per person.

On the downside, the resources available to each of you will be limited, and you could be affected by the actions of others. For example, if your brother downloads ten games, he may be using up 80% of the hard drive. What’s more, if one of his downloads contains a virus, it could potentially stop everyone else in the family from being able to use the computer.

Shared hosting is very similar to having a family computer. The server you’re using may be quite powerful, but hosting companies will typically put hundreds (sometimes thousands) of users on it. This is how they keep the costs down to the $4-to-$8-a-month level. A powerful dedicated server — where you alone use the server — typically costs upwards of about $350 a month. If a company uses the same hardware but puts 300 people on it, they receive over $1,200 a month — not a bad deal (for them)!

Of course, you shouldn’t really expect a whole lot for such a low cost. If there’s a website with a memory leak on the same server you’re on, you’ll be affected. If a site uses 80% of the memory, all other websites (which could be thousands) can only access the remaining 20%. What’s more, malicious attacks towards a single website on a server may spread problems throughout the whole user base. This is often referred to as the ‘bad neighbor’ effect. The worst part is that it’s completely unpredictable, which makes it almost impossible to plan for.

Some shared hosts are better than others at mitigating these negative effects, but the same basic problem applies to all shared hosts because of the very nature of shared hosting.

VPS Hosting

Compared with a shared hosting service, a VPS (Virtual Private Server) is a superior solution in almost every way when it comes to technology. Technically, VPS servers are actually still ‘shared’ environments (in as much as there will still be more than one user running on the same physical machine), but the technology used to assign resources and keep users separate is much more sophisticated.

The key difference is how resources are divided. Much fewer users use the same hardware and each has their own ‘private’ environment, which makes it seem as though they each have their own server.

With shared hosts, it’s essentially a kind of a free-for-all type of service: Whoever grabs the resources first gets to use them. If the server has 16 GB of memory, then a single website (out of thousands) could potentially end up using almost all of it.

On VPS servers, the amount is divvied up in advance. For example, lower-end VPS plans might allocate 2 GB to each user; each of these users would then be able to use as much of that 2 GB as they need, but none would be able to overstep their own individual 2 GB allowance.

Allocating resources per-user makes for a much more stable and predictable environment. Can you still run out of memory? If you have a poorly coded website, or you go viral and get tens of thousands of visitors overnight, then sure. However, VPS plans almost always allow you to get some additional memory as and when you need it (albeit for an added fee, of course). The takeaway is that you won’t be adversely affected by what any of those other users/websites on the server do.

Another advantage to this is better security for everyone. There are instances of scripts that can bypass the hypervisor — the process that creates the virtual servers — but these are exceedingly rare.

Cloud VPS Explained: Cloud vs VPS Hosting

You’ll see some companies offering something called a ‘Cloud VPS’. In fact, a lot of providers who previously offered vanilla VPS services have now moved to cloud hosting.

Cloud hosting and VPS hosting share a lot of similarities and, for regular people, you’re not going to be far off the mark if you just think of cloud hosting and VPS hosting as essentially the same thing.

With both, your account gets its own dedicated set of resources on shared machines. However, the hardware that underlies those partitioned resources is different:

  • ‘Traditional’ VPS Hosting — you get your own partitioned resources on one physical server.
  • Cloud VPS Hosting — you get your own partitioned resources, but those resources are spread over lots of different servers (‘the cloud’).

For the rest of this article, we’ll use the terms ‘VPS’ and ‘cloud VPS’ interchangeably.

Should I Switch To VPS?

The simple answer? Yes. You should almost definitely consider moving away from shared hosting if you’re running a serious online business — although, depending on the type of website you’re running, a VPS may not be the only choice worth considering — but we’ll get to that a bit later on.

I can think of only two good reasons for when a shared host may be a better option than a VPS:

  1. You’re on a tight budget and just plain can’t afford a VPS.
  2. You’ve got a number of low-traffic websites that you’d like to keep live but aren’t yet of any real significance.

If you’ve just started a company and funds are tight, you may want to choose the $5-a-month shared option instead of paying for a VPS. That said, don’t forget that your website may be the backbone of your money-making efforts. If so, it could be the better choice to spend more on your website and put aside things such as getting branded stationery and/or holding catered office lunches.

Another good reason to use shared hosting is if you have some very low-traffic sites you want to keep running but don’t want to ‘pollute’ a VPS account with them. Typically, these sites won’t need any significant power and a little downtime here won’t be a big issue.

In all other cases, a VPS account is a good idea, and I’d advise that any serious business switches to one at the earliest opportunity.

Perhaps the more relevant issues are how much to spend on a VPS and what the options are once you’ve decided to make the switch.

One question you may have is: ‘What about bandwidth and storage? My shared host allows for unlimited bandwidth and storage, whereas VPS accounts typically impose relatively heavy limits on those.’

Strictly speaking, this is true, but you’ll almost certainly never actually find yourself running into storage limits unless you have a very, very large website (typically with huge amounts of your own uploaded — not just streamed — video content, for example). Storage space on lower-end VPS accounts is about 25 GB, which is A LOT of space.

Do keep in mind, though, that every host that has ‘unlimited’ anything also has a ‘fair use’ policy, meaning you can’t use it as a repository for all of your stuff. You can’t get a cheap Bluehost account, for example, and then store 50 GB of ripped DVDs there — they will cancel your account as soon as they find out.

The same is roughly true for bandwidth. A low-end VPS typically offers around 1 TB of data. Let’s see how much this is. The average website size is about 2,000 KB. By dividing the allowed bandwidth with this number, we get the rough number of monthly visits 1 TB allows for, which is about 500,000.

If you have this many visitors on a shared host, you’ll almost certainly be using way more resources than you should be and your website will be down pretty much all the time. In fact, if you have anywhere near 500,000 visitors a month then you should probably be looking for much higher-end hosting solutions anyhow — and, with traffic like that coming to your site, you’ll likely have more than enough money to do so!

Different Types Of VPS

VPS accounts are differentiated based on the amount of resources you’re allotted.

You can now find entry-level managed cloud VPS services for only ~$10 a month with roughly the following resources:

  • 1 core
  • ~1 GB of memory
  • ~25 GB of storage
  • ~1 TB of bandwidth

Higher-priced plans give you more like:

  • 8 cores
  • ~10 GB of memory
  • ~150 GB of storage
  • ~5-10 TB of bandwidth

That sort of setup will tend to set you back anything from about $150 a month and upwards.

If you’ve been getting away with a shared host so far, a $10-a-month cloud VPS server will probably suit your website/needs. What’s more, should you need to, most VPS hosts will let you scale up on practically a moment’s notice — simply pay them a little more and they’ll add more resources to your site.

What Else Is There?

Besides VPS, another very viable solution — if you’re running a WordPress-powered website — would be to opt for ‘managed WordPress hosting‘. Managed WordPress hosting may (technically speaking) be run on either shared or VPS servers, but, because such services are specifically tuned to running only WordPress, they come with a number of significant benefits — one of which is speed!

Most premium managed WordPress hosts use cloud VPS hosting, although some do still use shared environments on their entry-level plans.

Learn what managed WordPress hosting is 👈

If you’re looking to choose a hosting solution for a website running only WordPress, be sure to take a look at an earlier article of ours called Shared vs Managed WordPress Hosting, which goes into some considerable depth on the topic.

Nowadays, most hosting companies offer a VPS option (or a cloud hosting option). I’ve rounded up some of the best below, with a few words on why they’re each worth considering.

For a deeper look, you can also browse our full collection of the best VPS hosting for WordPress sites.


SiteGround are a big, well-known company in the hosting world. I’m particularly fond of their support, and have had a couple of great experiences with them.

A couple of years ago, they moved to calling their VPS offerings ‘Cloud Hosting’. Plans start at $80 a month for:

  • 4 GB RAM
  • 2 CPU cores
  • 40 GB storage
  • 5 TB bandwidth

Liquid Web

Liquid Web are another well-rated host offering a ton of services. One of those services is their cloud VPS, which is more affordable than SiteGround for the resources you get.

Plans start at $59 a month for:

  • 2 GB of RAM
  • 2 vCPU
  • 40 GB storage
  • 10 TB bandwidth


Cloudways offer an easy way to manage your own cloud VPS from your choice of five different providers:

  1. DigitalOcean
  2. Linode
  3. Vultr
  4. AWS
  5. Google Cloud

Normally, creating a VPS with these providers requires some technical knowledge, which puts it out of reach of many webmasters. However, with Cloudways, you can spin up your own cloud VPS without needing any special knowledge.

The price you pay depends on which provider you choose and the resources you want access to.

The cheapest price point is DigitalOcean’s entry-level server which costs $10 a month for:

  • 1 GB RAM
  • 1 CPU core
  • 25 GB storage
  • 1 TB bandwidth

As already mentioned, I think switching to a VPS service is a great step for just about any serious company — but what if you’ve got a number of low-traffic sites, or you need a bit more time to gather those all-important funds?

In those cases, I’d recommend taking a look at SiteGround (already mentioned in the ‘Prominent VPS Hosts’ section above).

SiteGround offer high-quality shared hosting services at more-than-affordable prices and will easily be able to upgrade you to a cloud VPS as and when it becomes necessary.

SiteGround’s shared prices start at just under $5. However, choose any of the well-reviewed large shared-hosting companies (see here for more) and you can’t really go far wrong; the issues of bad neighbors and the like may occasionally haunt you, but a company with powerful servers and good customer service can — and will — hedge this risk significantly.


VPS is better than shared hosting in every technical way. If you can’t afford $60 a month for a good VPS from SiteGround or Liquid Web, I’d even recommend going with a dirt-cheap $5-a-month VPS from, say, Vultr instead of staying with a shared host once your website begins to experience shared-hosting-related difficulties. Shared environments are pretty much out of your control, which can be very frustrating.

If using Vultr directly is out of your knowledge range (it requires some technical knowledge), you can pay a slight premium to Cloudways to have them do everything for you — you can still get started for ~$10 a month, and you’ll have a much better setup than most shared hosts.

A good alternative to a general VPS — if you’re running WordPress — is managed WordPress hosting (read more). These are usually a bit more expensive than the baseline VPS services, but can provide significant speed and reliability boosts, as well as tons of convenient features, such as automatic backups, staging sites and more.

If you have any experiences with VPS or shared hosting let us know — we’d be interested to hear your take on which to choose and why!

By Colin Newcomer

Colin Newcomer is a freelance writer and long-time Internet marketer. He specializes in digital marketing and WordPress. He lives a life of danger, riding a scooter through the chaos of Hanoi.
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