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VPS vs Dedicated Hosting – How To Make The Right Choice For Your Business!

If you have a great website that’s starting to attract a lot of visitors, you’re likely beginning to wonder about the potential benefits of upgrading to a new hosting plan. For many companies, this boils down to two choices: VPS (virtual private server) or dedicated hosting.

Both types of hosting are a major upgrade over cheap shared hosting, which is where many webmasters start out. However, while both are definitely an improvement, it’s important to understand the key differences between a VPS and a dedicated server, so you can choose the option that’s best for your website.

Spoiler alert — a VPS is going to be the best option for most people. But I’m getting ahead of myself. Before I can get to that, I’ll introduce you to how VPS and dedicated hosting works and how to choose the approach that’s right for you.

Then, once I’ve covered the theory, I’ll recommend some of the top VPS and dedicated server providers to help you to get up and running with a quality company.

A Basic Introduction to Servers and Hosting Plans

To start with, let’s go over a few hosting-fundamentals, such as the difference between a server and a hosting plan.

A server is pretty much just a computer with a hard drive, a CPU, some memory and a bunch of input/output ports — in many ways, it’s actually very similar to your computer at home. Independent of whether you get a VPS or a dedicated plan, it stands to reason that the bigger and more powerful the hardware in the server, the faster your site will potentially be able to run.

Some of the above-mentioned hardware components are particularly important when it comes to selecting a server plan — including the following:

  • The speed of the CPU.
  • The amount of available memory.
  • The amount of storage/disk space.

So, what makes choosing a server so problematic? The answer lies in two other factors that contribute to your server environment — your hosting plan and how these hardware components are actually used within the server.

A hosting plan is more than just a server. A hosting plan is made up of the server and a number of management services, such as core software upgrades, various security protocols (i.e. malware scans and automatic virus removal), and general performance monitoring, to name just three. To accurately judge the suitability of a hosting plan, you should be aware of the following factors:

  • The server hardware.
  • The various management services included.
  • How the hardware is used.

The last item on the list — how the hardware is used — is more or less what separates VPS and dedicated hosting plans. So, let’s move on…

How Dedicated and VPS Hosting Works

With dedicated hosting plans, there’s only one user who gets to use ALL of the hardware on the server. In contrast, with a VPS hosting plan, the server’s hardware is virtually divided between multiple users (that’s where the ‘virtual’ in ‘virtual private server’ comes from).

Dedicated Servers

You can think of a dedicated hosting plan in a similar way to your own regular computer. You own all of the hardware and you and you alone have access to all of the resources available. What’s more, because you own everything, you can also make sure each piece of hardware and software is exactly what you want it to be. Want to use a specific brand/model of processor?  A dedicated server gives you that level of control.

Let’s look at a non-technical analogy to drive home the point. Let’s say you want to rent some office space for your business…

A dedicated server would be like renting a standalone office building — the entire physical building. You’re the only one with access to that office building — you don’t need to share resources with anyone else. You can also decorate it and arrange it exactly as you want. Want to paint the walls a certain color? You can do that. Want to swap out the furniture for something else? You can do that too.


A VPS, on the other hand, is like owning part of a computer. For example, let’s say the computer has 16 GB of RAM and you share it equally with three other accounts. Each account would get 4 GB of the computer’s overall 16 GB of RAM. However, unlike shared hosting, you don’t need to share your 4 GB with any other account. That is, while you only get a part of the server’s resources, those resources are 100% yours.

To achieve this division, a VPS provider uses ‘virtualization’ technologies to effectively split the resources between multiple users. In technical terms, the VPS provider uses something called a ‘hypervisor’ to partition each account on the server. The hypervisor ensures each account is completely separate from the others. It’s also what makes a VPS more secure than shared hosting. While it’s theoretically possible for a malicious actor to bypass the hypervisor, it’s virtually impossible and extremely unlikely to happen. This means your site doesn’t have to worry about problems with other accounts on the server.

Going back to our office analogy, using a VPS would be like renting a private room inside of a coworking space — you’re still sharing the overall building with other companies, so you couldn’t rip out all of the furniture and repaint the walls like you could with a dedicated server. But, at the same time, you also get your own private area inside your private room that you don’t need to share with anyone else. For most businesses, that private area is all you need.

Nowadays, many VPS providers use cloud hosting infrastructure to power their services. The basic idea is the same, but there’s a slight difference in what’s happening under the hood:

  • ‘Traditional’ VPS — your site’s resources come from part of a single physical machine.
  • Cloud VPS — your site’s resources come from a network of computers (‘the cloud’).

They’re technically slightly different things, but, as an end-user, you can think of them as essentially the same. Most of the VPS providers I recommend below use this cloud VPS approach (more on that later).

The Main Differences Between Dedicated and VPS Hosting

It’s important to understand the only differences between VPS and dedicated servers that are worth highlighting stem from how the hardware is used. Both VPS and dedicated hosting can offer low-end and high-end servers, and both can be blazing fast! Likewise, both services can come with automatic malware scanning and removal, yearly security audits, and more.

Some packages will include specific services for free, while some will require you to pay a little extra, so you’ll need to take a close look at the specific management services offered by whichever hosting company you’re considering.

Now, let’s turn our attention to the differences that stem from the architectures of the two types of services.


This one is pure economics. If a hosting company can put more people on the same server, they can make these packages cheaper because their costs per customer will be lower. This makes VPS options much cheaper than their dedicated counterparts. Low-end unmanaged VPS services start at just $5 a month. With that being said, a VPS with more resources and/or management services can also easily run into hundreds per month.

Even the most low-end unmanaged dedicated server will cost at least $50 a month — and that’s the very low end. Other low-end dedicated servers are more typically in the $80 to $100 range. Mid-range solutions will be around $250 a month, and from there on the sky’s the limit. Depending on your needs, a completely managed dedicated hosting plan may even set you back thousands of dollars a month — though this is usually for websites with tens of millions of visitors a month.


Dedicated servers are generally said to be more secure than VPS. This is because, in addition to all of the usual threats that any hosting plan must face, a VPS has a particular weakness that a dedicated server doesn’t: The hypervisor.

Aside from having the coolest name ever, the hypervisor handles creating and managing each of the virtual machines (allotments) on the server. Most viruses only affect one virtual machine (i.e. a single user account), but, in some very rare cases, they may actually be advanced enough to bypass the hypervisor completely, spreading to all of the accounts on the server.

Is this something most people need to worry about? No, not really. But, if you’re in a very security-conscious space (e.g. financial services), the extra peace of mind a dedicated server offers may be worth it.


Configuration flexibility is one aspect where dedicated servers really stand out. Because you’re the only user on the system, you have near-total control over everything — and can therefore do pretty much whatever you want with it, right down to changing various parts of its core software and/or hardware.

By having full control over the server, you’ll be able to (as long as you have the skills) put together a configuration that’s just right for whatever site you’re running. Most users won’t ever need to — or want to — play around with such settings, but, for those who need a very specific configuration to run a highly specialized application or other special cases, a dedicated server will likely be the only viable choice.


Performance is largely related to the server’s hardware specifications. Given two servers with the same specifications, dedicated servers will always have a performance advantage over VPS servers, because they don’t have to share the resources between users and with a VPS server. Put simply, there’s a slight performance ‘tax’ to using a server in a visualized setup. However, as technology advances, this ‘tax’ gets smaller and smaller.

In 2021, it’s certainly possible to achieve excellent performance with a VPS alone, even under large traffic loads. For example, the top-tier VPS plans from providers such as DigitalOcean or Linode can easily rival a quality dedicated server.

How to Choose Between VPS and Dedicated Hosting

In a nutshell, VPS hosting is almost always a better option than upgrading to a dedicated server, especially with the introduction of low-cost, high-performance VPS options from providers such as DigitalOcean. In most situations, a VPS can get you the same or better performance and reliability as a dedicated server in a much cheaper package.

What’s more, it’s very easy to scale a VPS now, which means you can easily add resources to your site as it grows. For example, the top-end general-purpose VPS from DigitalOcean (one of our recommended providers) offers the following resources:

  • 160 GB RAM
  • 40 virtual CPUs
  • 500 GB SSD storage
  • 9 TB bandwidth

That will knock the socks off most dedicated servers, so a VPS can certainly stack up well when it comes to performance and resources.

More importantly, a VPS still eliminates all of the biggest drawbacks of shared hosting — the ‘shared’ part. Having to share actual resources with other sites can be a huge drag on performance and reliability. Both a VPS and a dedicated server let you avoid that, but a VPS does it in a much more budget-friendly package — you can learn more in our shared vs VPS hosting comparison

That doesn’t mean you should never use a dedicated server. But it does mean you’d better have a good reason for doing so. So, what are some of those reasons?

When Should You Choose Dedicated Hosting?

To decide whether you’re in one of the situations where you need a dedicated server, you should ask yourself three questions:

  • Does my site regularly experience traffic well in excess of 500,000 page views a month?
  • Do I need highly specialized hardware and/or software? More importantly, do I have the expertise to actually set this up?
  • Do I have unique regulatory requirements that require a dedicated server? If you’re in a highly regulated field, such as legal, banking or government services, you may need/want an entirely dedicated environment for peace of mind and/or regulatory compliance.

If the answer to any of these questions is ‘yes’, you should seriously consider researching a dedicated hosting solution. If the answers are ‘no’ — which they will be for the vast majority of people — you should be fine with a VPS.

Best VPS and Dedicated Hosting Providers

If you’ve gotten this far, you should hopefully have a good idea of which type of hosting is right for your needs. Again, the right choice is almost always going to be a VPS, but you may want a dedicated server if you meet the scenarios in the previous section.

Now, let’s cover the next important question — if you’ve decided that a VPS or dedicated server is right for you, which are the best providers for those types of hosting? Let’s start with VPS providers because that’s what I think most people should use.

Best VPS Providers

One of the most important considerations in choosing a VPS provider is whether or not you want an unmanaged VPS or a managed VPS, and, if you want a managed VPS, which actual management services do you want? Remember:

  • Unmanaged VPS — you only get the hardware. You don’t get help with setting it up or maintaining it.
  • Managed VPS — your host will help you to get up and running, and make sure things generally go right. You may also get convenient services, such as automatic backups, malware scans and server management tools, depending on the host.

In 2021, the best choice for an unmanaged VPS is usually to go with one of the top cloud VPS providers. Here are some of the best options:

Again, these providers all offer unmanaged solutions, so, unless you’re a developer or have some tech chops, you won’t be able to use them by yourself. To get around this limitation, you could pair your unmanaged VPS with a more user-friendly server control panel such as cPanel, Plesk, RunCloud or GridPane (only for WordPress sites).

An even simpler option would be to use Cloudways, which is a managed hosting service that lets you choose your own preferred cloud VPS provider from five options — DigitalOcean, Linode, Vultr, AWS or Google Cloud.

On the other hand, if you want a managed VPS, many established web hosting companies offer their own managed VPS products. Here are some good options:

  • SiteGround — managed cloud VPS plans starting at $80 a month.
  • A2 Hosting — managed VPS plans from $34 a month (or unmanaged plans for just $5).
  • DreamHost — cheap managed VPS plans from just $10 a month.
  • Pagely — very premium managed VPS plans for WordPress sites from $199 a month. A good option for serious businesses with mission-critical WordPress sites.

For some other options, check out our collection of the best VPS and cloud hosting services for WordPress users.

Best Dedicated Server Providers

A dedicated server is a more specialized product, so you’ll want to shop around. However, here are some of the bigger names to get you started:

  • Liquid Web — a well-respected provider with unmanaged dedicated servers from $169 a month. You can add management for an extra $20 a month.
  • Hetzner — a popular budget-friendly host in Europe that has very cheap unmanaged servers from €40.46 or managed offerings from €100+.
  • Hivelocity — unmanaged dedicated servers from $99 a month.
  • DreamHost — fully managed dedicated servers from $149 a month.


You should now have a good understanding of the various differences between dedicated and VPS hosting. All else being equal, you should almost always choose a VPS, unless you meet one of the specific situations I detailed above. A VPS offers everything most webmasters need, and you can still easily scale it to handle high-traffic situations.

Don’t forget, though, that the various management services you receive with your hosting plan are just as important as the specs and the customer service — so be sure to check these out thoroughly with a few different hosts before making that all-important final decision!

While the prices on those DigitalOcean and Vultr VPS plans certainly look cheap, remember those are unmanaged servers. If you want managed services, you’ll need to spend a bit more — either by choosing a managed provider or paying for a server control panel. But, even then, you’ll still be paying a lot less than dedicated hosting.

Used/using either a VPS or dedicated server? Thoughts and experiences with each?

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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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