VPS Hosting: How It Works, How-to Choose, Recommendations & Discounts

All you need to know about virtual private server hosting - how VPS hosting works, when to switch, how to choose, and some personal recommendations.

Article updated Mar 24th, 2016.

This guide is dedicated to those who wish to learn more about virtual private server (VPS) VPS hosting. As VPS and shared hosting are two very different hosting environments; we need to look into a different set of factors when choosing a VPS plan.

Tl; dr: What’s in this guide

This guide consists of the following subjects –

What is VPS Hosting?

The easiest way to explain what VPS hosting – or Virtual Private Server hosting – entails is to think of it simply as a server within a bigger server.

A geeky term I often use to explain VPS:

VPS hosting = Shared Hosting + Server Root Access + Dedicated Resources + Isolated Environment

How VPS hosting works?

In VPS hosting, every website is hosted on a virtual private server on a more powerful hardware.

A physical machine is divided into several virtual compartments, and server software is setup on them separately, making each unit capable of functioning independently.

Image credit: Gouri Web Media

Image credit: Gouri Web Media

Though other websites may be hosted on the same physical system, yours would be the only website(s) hosted in the virtual compartment allocated (with independent server resources as CPU, RAM, disk space, etc.) to you. Other websites on the machine won’t affect the performance of yours. That means you get exactly the same system resources you pay for.

It’s like each website resides in an isolated room with sufficient resources to live with.

You get complete root access to your server as if it were your dedicated server. But technically you are still on the same physical machine and sharing its CPU, RAM, disk storage, and bandwidth. VPS hosting gives you complete control over your server and almost the same benefits of the pricey dedicated server. This way, you can get a virtual dedicated server for a much cheaper price and get higher performance for your website than a shared server.

VPS vs. Shared Hosting

The biggest difference between a shared and VPS hosting is how server resources are being shared. Note that dedicated server resources (such as RAM and CPU power) are allocated to each VPS slice.

The biggest difference between a shared and VPS hosting is how server resources are being shared. Note that dedicated server resources (such as RAM and CPU power) are allocated to each VPS slice.

Think of it like real estate. Hosting in a shared hosting environment is like renting an apartment; there is one landlord (the hosting company) who owns the full space and all assets.

That landlord leases out the space and communal assets such as a pool, workout facility, parking lots, etc. (or in hosting terms, CPU, RAM, disk space, etc.) – and all residents share those communal resources. VPS hosting is like the next step “up” – or a condo – in which you actually own your own space. You’ll still share communal assets – though you have actual claims to certain portions of them, but unlike the apartment (shared hosting), you are responsible for maintaining your own interior space and making your own repairs and modifications.

Additionally, there are significantly fewer residents and, as a bonus, assigned parking. More or less, you have rights to your space and a specific allocation of the resources – rather than pulling from a shared pool all of the time.

Issues with VPS Hosting (vs. Shared Hosting)

Pros vs cons: VPS compared to shared, dedicated, and cloud hosting.

Pros vs cons: VPS compared to shared, dedicated, and cloud hosting.

All of this having been said, before you make the switch from shared server to VPS hosting, you need to know that there are some disadvantages.

For one, VPS hosting is generally more expensive than shared server hosting environments. Also, you’ll need some technical ability – especially if you are planning to use an unmanaged VPS host. Beyond that, VPS hosting can entail some extra time and effort to manage – for example, monitoring and maintaining the server to ensure that it remains secure and in reliable condition requires some time and know-how.

VPS vs. Dedicated Hosting

VPS is kind of like entry-level home ownership; you have the benefit of lower costs, but still enjoy shared community amenities – versus the next step up, dedicated hosting, which is like owning your first free-standing home.

In dedicated hosting, you have your very own space and are responsible for everything on the property – think interior cleaning and maintenance, as well as the exterior and landscaping. You’re on your own in this hosting scenario, and as such, need to have some technical experience and prowess.

The VPS hosting is the middle ground, providing a step up from the shared “apartment” hosting that comes with more assigned allocations and guaranteed resources – but still affords you the benefit of a “landlord” should you need repairs, maintenance, or support.

Who Uses VPS hosting?

Is VPS the right answer for your site?

Most hosting users are on VPS hosting for more server resources (shared hosting offers limited CPU resources, even if it’s an “unlimited” plan) and better control over the hosting environment (safety). Also, some users who are wary of the technological know-how simply take VPS hosting as the stepping stone to dedicated hosting.

If you are on shared hosting, when is the right time to switch?

Most websites launch using a shared hosting plan. And that’s absolutely okay because shared hosting is the easiest option for starters – it’s cheap, easy to manage, and requires very little technical knowledge. However, as your site grows and demands more functions, VPS hosting becomes a necessity at some point.

In case you were confused, here are a few indications that (maybe) it’s time to switch over to VPS.

1. Heavy Traffics

You have a high amount of incoming traffic. Sometimes you will receive a notification from your shared hosting provider if you are pulling too many resources from the shared server – this is a tangible way to know that you need to upgrade your server capacity. If you don’t receive a notification from your provider, watch your load times and visitor traffic – your growth is an excellent indication.

2. Reliability and security

You need a stable stream of resources for better website reliability. Or, you need to implement better backups, advanced monitoring capabilities, and enhanced security features (such as SSH – or secure shell access)

3. Better control / Server root access 

You have reached a point that you require complete control over your web host to perform more advanced actions, such as installing custom software or a custom server configuration.

Or, you need better control over your users. For example, if you are a developer who helps clients to design and host their own websites, you likely take on some of that hosting work and responsibility – VPS hosting will give you better control over user access, while also allowing you to give your clients access to the servers.

Additional help: Step-by-step guide on switching web hosts

How to choose the right VPS hosting?

As you look to make your choice, there are some general factors to take into consideration.

Factor #1: Windows vs Linux

To start with, you need to know which type of VPS environment you will run: Windows or Linux. Linux is a different ballgame than Windows, but certainly has its perks. Regardless of wants and comfort levels, if your site is running on ASP or ASP.net, you will need to use a Windows environment.

Factor #2: Managed vs Unmanaged

In shared hosting, you don’t get root access to the server and hence the question of managing the server does not arise.

But when it comes to VPS hosting, the whole virtual server is handed over to you. So, there needs to be somebody to look after it and monitor its performance. If this is taken care of by your VPS provider, then it is called managed VPS, whereas in unmanaged VPS you need to take the responsibility of your server all by yourself.

Unmanaged hosting requires you to monitor the performance and keep the server running in good health. If your server software happens to crash, or some security issue manages to creep in, you are the one to fix it being the only administrator of your VPS.

So, if you are a seasoned geek, who knows the ins and outs of server management and are familiar with stuff like shutting down, repairing, restarting, rebooting the server, then you are a good candidate for unmanaged hosting. Else, you should choose to pay a little more and go with managed VPS.

The extent to which a VPS is managed varies from vendor to vendor and even with different plans with the same vendor. So, you should keep this in mind while comparing different VPS plans or vendors before you go ahead with finalizing one for you.

Most VPS hosting providers offer managed VPS hosting by default, but unmanaged does allow for some additional freedom – provided, of course, that you know how to and are comfortable managing and configuring everything by yourself.

Factor #3: Redundancy and Scalability 

Redundancy basically refers to having a backup resource in place, especially at the data center. If the regular power supply fails, generators and UPS systems should be there; if the services of the ISP are interrupted, some other alternate arrangement should be there, if one server is overloaded, another standby server should be there; so on and so forth. Scalability, on the other hand, indicates the ability to handle sudden, occasional increased loads on the server, usually by making use of the redundant resources in the system. Both of these combined together translates into higher uptime and consistent performance.

Factor #4: Price

Example - VPS hosting price at InMotion Hosting. FYI, you get 40% discount if you order via WHSR's discount link.

Example – VPS hosting price at InMotion Hosting. FYI, you get 40% discount if you order via WHSR’s discount link.

As is the case with any purchase, price will play a part in your decision as to whether you move to VPS – and with which hosting provider.

Price varies considerably for VPS hosting, simply because of the variability and nature of the hosting environment. VPS hosting costs depend on numerous factors, such as customization options, the different hardware specs, service levels, and more.

That said, to provide something of a baseline, you should expect to pay somewhere in the range of $8-$15 for a basic VPS hosting package that includes 1 GB RAM and 20 GB storage.

VPS Hosting Pricing Guide: How Much to Pay?

For those who are looking for cheap VPS hosting options, here’s a detail price comparison –

AltusHostArvixeA Small OrangeBlueHostDreamHostGoDaddy
Storage40 GB50 GB50 GB30 GB SAN30 GB SSD40 GB
Data Transfer2 TBUnlimited1 TB1 TBUnlimited1 TB
RAM1 GB1.5 GB2 GB2 GB1 GB1 GB
CPU Cores2422
IP Address221110
cPanel/WHMNoYesYesYesYesYes
Price /mo$19.95/mo$40/mo$30/mo$29.99/mo$15/mo$24.99/mo
HostPapaInMotionInterserveriWebLinodeLowEndBox
Storage50 GB60 GB25 GB50 GB SSD24 GB SSD30 GB
Data TransferUnlimited2 TB1 TBUnlimited2 TB250 GB
RAM4 GB4 GB1 GB1 GB1 GB1 GB
CPU Cores421112
IP Address22111
cPanel/WHMYesYesNoNoNo
Price /mo$46.66/mo$29.99/mo$6/mo$43.80/mo$10/mo$12.95/mo
MediaTempleMilesWebMDD HostingNetfirmsSecureDragonZNetLive
Storage60 GB100GB35 GB20 GB30 GB40 GB
Data Transfer1 TB1 TB1 TB1 TB2 TB800 GB
RAM1 GB1 GB1.5 GB512 MB2 GB1 GB
CPU Cores12241
IP Address21211
cPanel/WHMYesNoYesNoNoYes
Price /mo$49.95/mo$9/mo$55.88/mo$33/mo$12.99/mo$22.51/mo

Pricing table updated on March 24th, 2016

Factor #5: Cloud-based vs Conventional VPS Hosting

comic server management

We see the term cloud-based VPS hosting very often these days.

Many confused conventional VPS with cloud-based VPS hosting as both draw resources from a single source and both use virtualized environments.

Conventional VPS

To clarify – A conventional VPS is a smaller server within a bigger server (just like what I described earlier). Let’s call this bigger server as “Mother Server”. The Mother Server is actually a physical server – just like one of the rigs you see in a server room or data center. The Mother Server is sliced into a number of (limited) smaller servers and rented out as VPS hosting accounts. If there’s enough traffic, a VPS account will hit the physical limitations of the Mother Server; i.e. the real limitations on how many memory bars we can add into the Mother Server, how many storage disks the Mother Server can hold, and so on.

Cloud-based VPS

Cloud-based VPS, on the other hand, runs on multiple clustered servers. Like conventional VPS, a cloud-based VPS also draw resources from one single machine; but this machine is actually a combination of multiple servers (aka, many Mother Servers stick together, hence much bigger than the conventional VPS).

Which option is better?

Cloud based VPS has virtually no limit as you can always 1. add another server into the cluster (for some cloud setup you can do this on the fly – hence you can upgrade your server resources with zero down time) and 2. add more storage into the centralized storage system (SAN).

So, generally speaking – a cloud-based VPS hosting is better than the conventional type due to its flexibility.

Factor #6: Server Specifications & Configurations

Server specifications and features in Interserver VPS Plans. One thing I like about Interserver is its flexibility - you can customize almost everything and avoid paying for unused software or server resources.

Server specifications and features in Interserver VPS Plans. One thing I like about Interserver is its flexibility – you can customize almost everything and avoid paying for unused software or server resources. Source: http://www.nterserver.net

Configuration of your server – especially if you are on conventional VPS hosting – plays an important role in the performance of your website.

What capacity processor you will get, how much RAM you will be allocated and how big your share in the disk size will be, all matters. Apart from this, you should also find out about the quality of the physical machine your VPS is created on. It should be of reputed brand and high capacity; if the foundation is weak, you can’t expect a strong construction.

  • Server RAM & Storage. How much RAM and disk space are offered and included? In my opinion, you’ll need – at a bare minimum – 1 GB RAM and 20 GB storage. Of course, your exact needs will vary based on your website traffic, space requirements, etc.
  • Data Transfer. Are there any restrictions on data transfers? If so, what are your options if you exceed those limits? Most VPS hosts will impose some limitations – make sure you know what they are and what happens should you need to exceed them.
  • Distributions. What are your choices in VPS operating system? Does your site need to run on a specific Linux distribution (or depends on the latest version of the distribution)? It’s important that your VPS provider supplies the right distribution and updates the OS regularly.
  • Backup. What type of backup protocols are in place? How is your data and site architecture protected?
  • IP address. How many IP addresses are included with your service? If there is a limit, what is the cost for additional addresses?
  • CPU core. Web servers tend to use very little CPU power – unless you are running a game server. But still, you might want to find out how many core you were given in your VPS account.

Factor #7: Customer Support 

No matter how efficient and feature rich your VPS hosing provider is, problems arise from nowhere at times.

In such situations, you need a handy support team to sort things out. If they are unable to provide 24/7 customer support, they simply are not worth the money you spend. If you face some serious issue with your website and it goes unfixed for too long, you may lose your potential visitors and that could mean you lose a lot depending on the type of website you have. It is better to test the customer support team of a hosting provider before determining whether to go with them.

Factor #8: Trial Period

Most hosting providers will offer a free trial period (which is really a money-back guarantee should you be unsatisfied with the service).

Find out what the trial period is – then, during that period, make use of server monitoring systems, such as Pingdom or WHSR Uptime Monitor, to track server uptime and responses.

Recommended VPS Hosting

Here are a few VPS hosting services that I recommend. Note that I am affiliated to InMotion, Interserver, and Rose Hosting. I don’t recommend because they pay me; I recommend these hosts because they are good.

HostWhat’s good about it?Discount?Tested?ReviewOrder
Host ColorLow latency network with multiple peering partners; best for media streaming and application hosting.NoClick
InMotionHome of WHSR; reasonable price with great reliability.Promo code: (Not Needed)
50% one-time off, link activation.
YesReviewClick
InterserverCheap and reliable; very flexible – you choose what you need and only pay for the resources you use.Promo code: WHSRPENNY
$0.01 for first month
YesReviewClick
RoseFirst to offer commercial Linux VPS (back in 2001); reasonable price with great reliability.Promo code: WHSR
25% lifetime discount
YesReviewClick

For those who wish to compare ratings and have more choices, visit our hosting review index.