Shared hosting, VPS or dedicated server: how to choose

What you are actually choosing

Hosting plans differ on three things, and the price follows from them:

Resources: whether CPU, memory and disk are shared with other customers or reserved for you.
Control: whether you get root access and can install and configure what you need.
Responsibility: who applies security updates, watches the server, takes backups and restores them.

Managed versus unmanaged is a separate question from the hosting type. A VPS can be fully managed; a dedicated server can be handed to you with nothing but an operating system.

Shared hosting

Many sites run on one server, under one operating system and one web server, each in its own account with a control panel such as cPanel, Plesk or DirectAdmin. The provider handles the server; you handle your site.

Each account has limits on CPU, memory, processes and simultaneous connections. Busy neighbours can still slow the whole server.
You cannot install system software: no Redis, no long-running queue workers, often no Node.js or only a restricted version of it.
Outgoing email often shares an IP address with other customers, so their reputation affects yours.

It suits brochure sites, small WordPress sites with modest traffic and landing pages. Typical signs you have outgrown it: “resource limit reached” errors, a slow admin area at normal traffic, and features that need background jobs.

VPS

A virtual private server is a virtual machine on a hypervisor, usually KVM, often run through a platform such as Proxmox VE (which manages KVM machines and LXC containers) or the provider’s own system. With a KVM VPS you get your own kernel and operating system, an allocation of vCPU, memory and disk, and root access.

You can run what the application needs: tuned Nginx and PHP-FPM, Redis, queue workers, Node.js, Docker, scheduled jobs.
The hardware is still shared. Depending on the provider, CPU may be oversold and disk I/O shared with other machines on the same host.
Scaling up usually means resizing the machine, often with a short restart.
Unmanaged, everything above the hypervisor is yours: updates, firewall, SSH hardening, backups and monitoring.

Some cheaper plans are containers (LXC, OpenVZ or Virtuozzo) that share the host’s kernel, so kernel modules, some kernel settings and certain software are off limits. Check which you are buying. A VPS suits online stores, web applications, CRMs and groups of sites with predictable load.

Dedicated servers

A whole physical machine is yours. Nothing else runs on it, so CPU, memory and NVMe throughput are predictable. You choose the disk layout, typically mirrored drives with ZFS or Linux software RAID (mdadm); ZFS should see the disks directly rather than sit on a hardware RAID controller. You can also run your own virtualization platform, such as Proxmox VE, to split the machine into several VMs and containers.

A hardware fault affects only you, and it affects all of you. Plan for it with a second server, a replica or a documented rebuild.
Scaling means adding or replacing hardware, which takes hours or days, not minutes.
It suits sustained high traffic, large databases, I/O-heavy workloads, isolation requirements, and running many services under your own virtualization.

Who manages what

	Shared	Unmanaged VPS or dedicated	Managed VPS or dedicated
Hardware and network	Provider	Provider	Provider
Operating system and security updates	Provider	You	Provider
Web server, PHP and database tuning	Provider, limited	You	Provider
Firewall and hardening	Provider	You	Provider
Backups and restore tests	Check the plan	You	Provider
Monitoring and alerts	Server only	You	Provider
Your application and its updates	You	You	As agreed

“Managed” is not a standard term. Get the list in writing, especially who restores from backup, how often restores are tested, and what happens outside business hours.

When to move up

Move from shared hosting to a VPS when:

You hit resource limits during normal traffic, not only during spikes.
The application needs software the plan cannot run: Redis, queue workers, Node.js, a specific PHP version or extension.
Database queries slow down because the database server is shared.
You need your own IP address, your own logs or control over who has access.

Move from a VPS to dedicated hardware when CPU stays high for long periods, when steal time (the st column in top or vmstat) stays high because neighbours on the host take CPU you are allocated, when I/O wait shows that you are competing for disk, when the database no longer fits comfortably in memory, or when you want to run several isolated VMs on hardware you control.

One sample a second, five times: watch the st and wa columns

vmstat 1 5

Backups and disaster recovery

Off the server. Store backups with a different provider or in a different location. A snapshot on the same host does not help when the host fails.
RPO and RTO. Decide how much data you can afford to lose (recovery point) and how long you can be down (recovery time). These two numbers set backup frequency and architecture.
Consistent databases. Use proper dumps, or point-in-time recovery from binary logs (MySQL, MariaDB) or WAL archiving (PostgreSQL). Copying the files of a running database is not reliable.
Retention. Keep daily, weekly and monthly generations, so you can recover from ransomware or a bad change that is noticed late.
Restore tests. Restore to a separate server on a schedule. A backup that has never been restored is an assumption.
A plan for hardware failure. On dedicated servers, write down what happens when a disk or motherboard fails, and how long the rebuild takes.

Managed or unmanaged

Unmanaged works if someone on your team will apply updates, respond to alerts at night and restore from backup under pressure. If not, managed service puts that responsibility on the provider. Whichever you choose, ask:

Who applies operating system security updates, and how often?
Where are backups stored, how long are they kept, and when was a restore last tested?
What is monitored, and who receives the alerts outside business hours?
Do I get root access, and how does support change if I make my own changes?
How do I leave: can I get full backups and my data in standard formats?

A short rule of thumb

Brochure site with low traffic and no custom services: shared or managed hosting.
Store, CRM, web application or several sites with background jobs: a VPS, managed unless you have a system administrator.
Sustained heavy load, large databases, isolation requirements or many VMs: dedicated hardware, with the disaster recovery plan written before launch.

Where we fit

We run managed hosting, VPS and dedicated infrastructure on Linux, and we look after the applications on top of them. If you are unsure which tier fits, send us what you run today and we will tell you what we see.

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