Cloud vs. Traditional Hosting

Traditional Hosting
Traditional hosting is mainly of two types (1) Shared hosting and (2) Dedicated hosting. In shared hosting, you share a server with many other websites and customers. In dedicated hosting, you own a complete server to yourself. It’s essentially buying a computer and having a hosting company manage it to ensure it stays up and running, and connected at all times.
Most small to medium scale websites use shared hosting. It’s cost effective and requires low maintenance. However, the drawbacks are

  • Performance – You share the server (and storage and bandwidth) with other websites. It means that if traffic to other websites hosted on the same server goes up, your site will slow down.
  • Lack of control – You don’t have full control over the server. It means you cannot install any software as you need to. You can only use the resources that are already available on the server.

Large scale websites use dedicated servers as they need dedicated bandwidth and full control of the server.
The largest companies such as Google and Microsoft use data centers that are essentially a farm of dedicated servers. They use hundreds and thousands of dedicated servers because of their bandwidth requirements.

Challenges with Traditional Hosting
With traditional hosting, you need to purchase additional servers as the traffic to your website grows.
For example – if you have 10,000 users, you can go with shared hosting. When you have 100,000 users, you will get a dedicated server and then add more dedicated servers as number of users and volume to your website grows.
You will need to keep purchasing servers as the traffic to your website grows. The extra servers are of no use when the traffic slows down. In today’s world where hardware has become a commodity, the value of servers depreciates more than 50% every year. It means that your investment into purchasing new servers has a very small or negative ROI.

Cloud Hosting
Large companies such as Amazon, Google, Microsoft and Rackspace rent out their server farm (data centers) for customers to use on a per-needed basis. These companies are called as cloud infrastructure providers (IaaS).
Instead of investing money into purchasing new servers, you can rent the server(s) from the cloud infrastructure providers on a per-needed basis. This is called cloud hosting.
Think of this model as leasing a car (cloud hosting) rather than purchasing a car (traditional hosting). However, in the case of cars – where you can easily sell your used car to someone else therefore getting some return on your investment – in the case of servers, you really can’t sell it to anyone. Therefore the return on your investment is close to being zero.

What are the key benefits?

  • Huge cost savings: Cloud technology is paid as you go instead of being paid up front, saving organizations significant money. You pay for exactly what you use, not for additional server, storage or processing that you don’t use.
  • Flexibility and Scalability: Servers scale up and down automatically depending on the applications’ needs unlike traditional hosting where you have to manually add or remove servers as the traffic to your website changes.
  • Highly Automated: No longer do IT personnel need to worry about keeping software up to date.

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