Shared Web Hosting

• The cheapest option.  Service is managed.  Provider takes care of security patch, and system-wide software updates
• No guarantee of resources – providers generally pack as many accounts as possible in one box.  They’d shut you off when your site becomes popular as it eats up too much resource.  Your site’s performance will also degrade when another site on the same machine gets popular
• Very limited control of environment.   You can’t install your own software which depends on system software that the server doesn’t have.  Shared hosting providers are reluctant to install not-so-common software

Dedicated Hosting

• You rent a physical machine from your hosting provider. You can install whatever you want with the machine
• It’s generally more expensive than VPS.   They are mostly self-managed(you takes care of security patch, and system-wide software updates), but you can pay more to get managed dedicated hosting
• Hardware cost is going down every year as new hardware comes out(Moore’s law).  Providers generally don’t low the price on your plan or upgrade even though the hardware of your machine has depreciated a lot. So you may get stuck with a outdated machine for a while.  It’s generally easy to have your provider upgrade the memory
• If you want to upgrade(moving to a new plan),  you generally need to transfer all the data on your own and reinstall everything.
• If your server is sitting idle most of time(your website/web application doesn’t generate enough load/traffic), you can’t really scale down the server resource(reduce the memory, downgrade the CPU) so that you can pay less

VPS(Virtual Private Server

• A physical server is partitioned into smaller isolated containers(VPS) using virtualization software.  The virtualization software allocates resources(CPU, memory, bandwidth, etc) to each VPS.  Each VPS has its own operation system you choose.  You can install whatever you want in VPS
• VPS is generally cheaper than dedicated hosting, but it really depends on the server spec
• Sometimes, a VPS is more powerful than a dedicated machine because the VPS sits inside a very power machine
• Hosting providers can generally give you more resources when you upgrade to your hosting plan, or take away resources when you downgrade your hosting plan
• Some VPS providers let you clone your VPS.  One common use is that you can set up one VPS, then clone it to have a cluster setup
• It’s easy to back up a VPC by taking snapshots.   Whenever before you upgrade/patch software, take a snapshot so that you can  roll the server back if something messes up(this happens more often than you think)

Our recommendation

We recommend going with VPS instead of dedicated hosting because VPS gives a virtualized dedicated hosting environment with more flexibility in regard of resource and backup.

We never recommend clients to use shared hosting because it’s too easy to grow out of it.  Lacking control of the hosting server really tights our hands.

When you grow your business after the above options are no longer good enough, you can go with colocation(bring and install your own hardware in data center.  Data center takes care the power and network connectivity), or scale up/down on demand with cloud computing(eg: Amazon web services such as S3, EC2)