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Are Dedicated Servers Better Than Cloud Servers?


Cloud based services continue to grow and with more options than ever, IT decision makers are under tremendous pressure to move to “the cloud.” Everything from file storage to hosting can now be done without the need for an on-site physical device, but one of the most fundamental components of an IT infrastructure is a server. Many businesses need their own server for storage, development, hosting and other business needs. How do you decide whether to host that server physically or virtually? To make the best decision for your business, you will need to compare a dedicated server with the cloud based alternative.

What is a dedicated server?

Before assessing the benefits and drawbacks of cloud servers, it’s important to clarify what is meant by a dedicated server. Small and medium sized businesses may license usage of an entire physical server from a service provider that’s hosted off premises within their data center. The business benefits from the service provider’s infrastructural resiliency, network capacity and management expertise. The server is single-tenant, meaning it is devoted entirely to one customer, who may virtualize the “bare metal” box with a hypervisor, which would allow it to run multiple virtual machines (VMs) on the device if they so desire. If they do, management of the hypervisor and virtual machines is the customer’s responsibility.

What is a cloud server?

Cloud servers are always virtualized with a hypervisor. All the hardware within the server is abstracted and a portion of its capabilities is virtually devoted to each operating system instance. Unlike dedicated servers that are virtualized, management of the hypervisor and virtual machines is the responsibility of the service provider. There are three primary types of cloud servers that are sold: public, private, and hybrid.

  • Private Cloud: this concept, also known as a Virtual Private Server (VPS), involves a service provider dedicating an entire virtualized physical server to a single customer entity. The customer can subsequently allocate the virtual machines across business units within their organization as they see fit, but at no time would a third party be using any of the virtual machines on that server.
  • Public Cloud: in this model, customers license virtual machines, which entitles them to a portion of the hardware capacity of the underlying physical server, but multiple customer entities could be allocated virtual machines on the same device. Virtual machines can be granularly configured and priced according to the exact capacity needed for the application it will be used for.
  • Hybrid Cloud: this solution incorporates private cloud servers that can borrow virtual machines from public cloud servers when needed. This practice is known as “bursting”.

Benefits of a Cloud Server for Small Business

The primary benefit of a cloud server for small businesses is its scalability. The virtual hardware capacity can ramp up and down as needed. The pricing model is extremely granular and rent is priced by time increments; some cloud servers can even be licensed down to the minute. This saves smaller businesses with volatile workloads from having to outlay capital for gear robust enough to handle their absolute peak load, even if it arises infrequently. Instead, they can pay the premium for extra capacity only when they need it.

Cloud Server Use Cases

Test and development

Prior to the advent of cloud servers, companies would have to make hard investments in physical infrastructure in order to test applications prior to production. Not only would this expend capital, but it also requires a guessing game, since it’s impossible to predict the actual consumption needs of a new workload. A cloud server not only spares the company from having to possess spare inventory for trialing applications, but also allows the environment to scale up and down as development is being conducted in real-time.

File Storage

Companies are collecting more data and analytics than ever before. Often, the amount of information worth keeping is difficult to project. Cloud storage allows customers to pay only for the amount of capacity they need without having to invest in large-scale, enterprise-grade storage arrays and drives to enable scalability. Additionally, they don’t have to maintain the talent needed to conduct daily maintenance of their storage regiment.

Disaster Recovery

Before cloud services were on the market, a company would have to stand up a mirrored physical environment in a separate location, requiring an investment in two of everything, even if the second environment was only there in case of an emergency. Cloud servers can be spun up when the unexpected arises, lowering the fixed cost for disaster recovery dramatically and actually improving the level of resilience.

Data Backup

Backing up your team’s work and data can be a time consuming task. With cloud services, data can be automatically dispatched to another location besides the physical devices your employees are working from. Backing up data in this way will help you comply with the best practice of 3-2-1 backup. This also improves productivity as data capacity and availability would not be an issue.

Non-mission Critical Applications

Some applications may not be mission critical to your business and may have cloud based alternatives that are more than sufficient. Office 365 is a great example of this. This cloud based version of Microsoft Office removes the need to download and maintain the Microsoft suite of tools across your company devices.

Benefits of a Dedicated Server for Small Business

When you choose a private cloud server, you pay a premium for the on-demand elasticity and hypervisor management, so the total cost of ownership is typically higher. If your application or computing needs are consistent, dedicated servers are the financially prudent choice.

It’s important to note that when businesses opt for dedicated servers, they must retain IT talent that’s able to maintain, patch, and upgrade the servers. Unlike cloud servers, which include those managed services, companies are left on their own when it comes to routine management when they take the dedicated approach. It is, however, a powerful solution for customers that are looking to scale cost-effectively, must keep their customers’ data safe at all costs by controlling the hypervisor, and rely on guaranteed peak performance to deliver a seamless end-user experience.

Dedicated Server Use Cases

High Performance Computing

If an application is resource heavy—requiring intensive RAM usage, disk I/Os and CPU utilization or requires multiple CPUs—a dedicated server is likely the best bet. Systems that require extreme performance may not be a good candidate for the cloud. Examples include video streaming, databases, and transaction processing systems. These should all run on physical boxes. Because a virtual machine runs in a layer on its host system, there will always be some level of performance sacrifice to the overhead involved when using the cloud.

Legacy Applications

The license and support agreements for some operating systems and applications do not permit virtualization and are actually null and void if the workload is transferred to a virtualized environment.

Untested Mission Critical Applications

Often, it can be too disruptive to refactor certain legacy applications for the cloud that have been serving their purpose just fine for years. Any mission critical application that has not been tested on a virtual machine should stay on a physical dedicated server even when it’s time for a server refresh.

Sensitive applications

When data protection is of utmost importance, it’s not worth risking liability by moving to the cloud. For small and medium sized businesses, ensuring compliance in the cloud is usually too costly or risky, especially when personal data is involved. Law firms for instance, show a desire to retain control and stick with dedicated servers to mitigate leaking their client’s highly confidential information.

Cloud Servers vs Dedicated Servers

In a nutshell, dedicated servers are best for consistent workloads and those with the most stringent computing requirements and cloud servers are ideal for unpredictable applications with usage peaks and troughs. The public cloud is less secure, since the physical device is shared by multiple customers, leaving dedicated servers and private cloud servers as a great choice for small businesses. Ideally, small businesses would leverage a mix of both, deploying each application in the environment that best suits its nature and needs.

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