One of the most important early decisions you need to make as a small business owner is selecting a server that is best suited to the needs of your organization. Essentially, there are three different big-picture options to choose from: cloud servers, dedicated servers and virtual private servers (VPS). The right choice depends on the kind of business you own and what your growth prospects are in the foreseeable future. Each of these systems has pros and cons depending on how you see your business developing.

Begin by asking yourself what you’ll use your server for. Is it for file sharing, email or backing up vital data? Will your employees be interacting with the server remotely through multiple devices or in a more linear way?

Finding the answers to these questions should provide a clear road map for the way forward.

Cloud Servers

When you host your online content with cloud servers, you are effectively renting virtual server space in a remote location, as opposed to renting or buying physical servers which you will install and run in your own dedicated space. You can choose to operate within the public cloud, setup a private cloud or employ a hybrid public/private approach. In all cases, you are entering into an agreement with a cloud host who then takes on the responsibility of making sure your website is always available, that the software is regularly updated and maintained, and your data is secure.

Interoute, one of Europe’s largest cloud services platforms, provides a compelling argument around the benefits of cloud hosting. With cloud hosting, clients get the best of both worlds. Resources can be scaled up or scaled down accordingly, making it more flexible and, therefore, more cost-effective. When there is more demand placed on the servers, capacity can be automatically increased to match that demand without this needing to be paid for on a permanent basis. The setup of a cloud server is also much simpler and quicker to get up and running than the installation of dedicated physical servers. As a result, the need for an IT team is much smaller when a company opts for cloud-server hosting.

Public Cloud vs. Private Cloud

Most people’s understanding of a cloud environment is in regard to the public cloud, where shared resources are offered collectively via the internet through a browser interface, like Dropbox. The public cloud is a perfect solution for the handling of non-sensitive information, as well as for services like video conferencing, virtual collaboration and webmail.

A private cloud uses the same underlying resources in much the same way as the public cloud, but it works off a particular cloud and provides secure access for only one particular user, as opposed to sharing resources with a variety of users. The private cloud offers higher levels of security and privacy for organizations via dedicated leased lines and firewalls for sensitive information.

An integrated cloud service that provides both private and public options is known as a hybrid cloud. Companies can maximize efficiency and minimize costs by using the public cloud for non-sensitive operations, while safeguarding their more sensitive information in a private cloud or on a dedicated server.

The Case for Dedicated Servers

While cloud servers have many arguments in their favor, there is also a compelling case to be made for dedicated servers. Unlike the private cloud, a dedicated server allows you to select your choice of hardware, operating system and settle on a fixed cost. Back-end performance and delivery speeds are generally much better with this kind of an arrangement, and full administrative control is part of the package.

The costs of a dedicated server tend to run higher than a cloud offering, as there is a dedicated, in-house IT team to manage the performance of the servers. Nevertheless, many companies find that in the long run it makes sense due to improved performance and a more satisfied customer base.

Virtual Private Servers

In many ways, the virtual private server (VPS) is the perfect midpoint between these two systems. Users experience the server as being dedicated only to their business — in that it runs its own private operating system — but in fact, it’s running on shared computer hardware which is running multiple operating systems at the same time.

This kind of setup means that online services can be offered at a considerable cost reduction due to the shared nature of the service.

With a VPS, hosting can either be managed or unmanaged. There is a cost savings for unmanaged services, but the responsibility for maintenance lies squarely with the user. This may not be an issue for larger organizations with existing IT departments, but it does have implications for smaller companies who generally opt for a managed VPS.

The right server setup for your business ultimately depends on your company structure. Consider an approach that caters to your day-to-day operations, budget and IT resources. Measure the pros and cons of all your options to find a solution that meets your needs today, and also, can grow with you.