Shared vs VPS vs Cloud Hosting: Which Do You Actually Need?

We've deployed 50+ websites across different hosting providers. The most common mistake: paying for a dedicated server when shared hosting would work, or using cheap shared hosting when the site needs VPS.

Here's how to choose correctly — with real prices and benchmarks.

The Four Types (Simplified)

Shared Hosting: When It Works

Shared hosting means your site sits on a server with hundreds of other sites. You share CPU, RAM, and bandwidth.

Good for:

• Landing pages and business card sites
• Blogs with <1,000 daily visitors
• WordPress sites with minimal plugins
• Static sites and portfolios

Bad for:

• Sites with custom server-side logic
• Anything needing root access
• Sites that get traffic spikes
• E-commerce during sales

Real-world performance:

Shared hosting (SiteGround):
- TTFB: 400–800ms
- Load time (simple page): 1.5–3s
- Concurrent users before slowdown: ~20
- Downtime during traffic spike: likely

Price range: $3–5/month. Look for:

• Free SSL (Let's Encrypt)
• PHP 8.x + MySQL
• Daily backups
• SSH access (nice to have)

Providers we've used: Hostinger ($3/mo), SiteGround ($5/mo), Namecheap ($4/mo). All work fine for small sites.

VPS: The Sweet Spot

VPS (Virtual Private Server) gives you guaranteed resources and root access. You get a slice of a physical server — typically 1–4 CPU cores, 1–4 GB RAM.

Good for:

• Sites getting 1,000+ daily visitors
• Custom applications (Flask, Django, Node.js)
• Multiple sites on one server
• APIs and backends
• Development/staging environments

Bad for:

• Complete beginners (requires some Linux knowledge)
• Sites that need auto-scaling
• Very high traffic (>100k daily)

Real-world performance:

VPS (Hetzner CPX21, $7/mo):
- 3 vCPU, 4 GB RAM
- TTFB: 100–300ms
- Load time (simple page): 0.5–1.5s
- Concurrent users before slowdown: ~200
- Handles traffic spikes easily

Managed vs Unmanaged:

• Unmanaged VPS ($7–15/mo): You manage everything. Cheaper but requires Linux skills.
• Managed VPS ($20–40/mo): Provider handles updates, security, backups. More expensive but hands-off.

Our recommendation: Hetzner CPX21 ($7/mo) for unmanaged, DigitalOcean ($12/mo) for managed. Both are reliable and fast.

Cloud Hosting: When You Need Scale

Cloud hosting uses multiple servers. If one fails, traffic routes to another. You pay for what you use.

Good for:

• E-commerce with traffic spikes (Black Friday, sales)
• SaaS applications
• Sites with unpredictable traffic
• Projects that need auto-scaling

Bad for:

• Small sites (overkill and expensive)
• Predictable, steady traffic (VPS is cheaper)
• Budget projects

Real-world performance:

Cloud (AWS Lightsail, $12/mo):
- 2 vCPU, 2 GB RAM
- TTFB: 50–200ms
- Load time: 0.3–1s
- Auto-scales to handle any traffic
- 99.99% uptime

The catch: Cloud pricing is usage-based. A small site might cost $12/month, but a traffic spike can push it to $50+. Set billing alerts.

Decision Framework

Ask yourself these questions:

1. How many daily visitors?

• <500 в†’ Shared
• 500–10,000 в†’ VPS
• 10,000+ в†’ Cloud or dedicated

2. Do you need root access?

• No в†’ Shared is fine
• Yes в†’ VPS minimum

3. Is traffic predictable?

• Yes в†’ VPS (fixed cost, guaranteed resources)
• No в†’ Cloud (pay for what you use)

4. Do you run custom applications?

• No (just HTML/CSS/JS or WordPress) в†’ Shared
• Yes (Python, Node.js, custom backend) в†’ VPS

5. What's your budget?

• <$5/month в†’ Shared
• $5–15/month в†’ VPS
• $15–50/month в†’ Cloud
• $50+/month в†’ Dedicated

The Migration Path

Most sites follow this trajectory:

Year 1: Shared hosting ($5/mo)
  ↓ Site grows, need more performance
Year 2: VPS ($10/mo)
  ↓ Traffic spikes, need scalability
Year 3: Cloud ($15–30/mo)
  ↓ High traffic, need dedicated resources
Year 4+: Dedicated ($50+/mo)

Don't start with dedicated. Start with shared, monitor performance, and upgrade when you actually need to.

What We Actually Recommend

For 90% of small business sites: Shared hosting from Hostinger or SiteGround ($3–5/mo). It's fast enough, cheap, and requires zero maintenance.

For growing sites and developers: Hetzner CPX21 ($7/mo). Best price-to-performance ratio. 3 vCPU, 4 GB RAM, NVMe SSD. We run our production sites on Hetzner.

For e-commerce and SaaS: DigitalOcean or AWS Lightsail ($12–20/mo). Reliable, scalable, good ecosystem.

Avoid: GoDaddy (overpriced, upsells everywhere), Bluehost (slow shared servers), any "unlimited" hosting claim (there's always a limit).

Quick Performance Tips

Regardless of hosting type:

1. Enable gzip/brotli compression — reduces payload by 60–80%
2. Set caching headers — Cache-Control: max-age=31536000 for static assets
3. Use a CDN — Cloudflare free tier handles most needs
4. Optimize images — WebP format, lazy loading
5. Minimize HTTP requests — combine CSS/JS files

# Nginx caching config
location ~* \.(jpg|jpeg|png|gif|ico|css|js|woff2)$ {
    expires 1y;
    add_header Cache-Control "public, immutable";
}

The Bottom Line

• Small site, small budget: Shared hosting ($3–5/mo)
• Growing site, need control: VPS ($7–15/mo)
• Scaling site, need reliability: Cloud ($15–30/mo)
• Don't overpay for resources you won't use

Start cheap, monitor performance, upgrade when metrics tell you to — not when your hosting provider's sales page tells you to.

We deploy websites on Hetzner, DigitalOcean, and GitHub Pages. Full source code: github.com/uriy-as/site