Private Cloud vs. Dedicated Hosting: What’s the Difference?

Companies and institutions have benefited from advances in cloud computing for many years. In order to seamlessly carry out complicated tasks, organisations rely on cloud hosting to run and maintain websites, applications, software and server infrastructure. The term itself encompasses a range of distinct cloud technologies available on the market today — host servers can be physical or virtual, private or public, or even hybrids that combine features of each.

When it comes to guaranteeing high performance while ensuring the cost-effectiveness of cloud computing for enterprises, IT managers and decision makers are spoiled for choice and often curious about how to choose the best solution available to them. For that reason, this article outlines the key difference between two popular cloud hosting options — private cloud and dedicated servers. Read on to find out which may be the best suited to your organisation’s needs.

What is Cloud Hosting?

Cloud hosting allows users to pool and access resources from a shared infrastructure in a way that is distinct from  traditional hosting solutions, as the cloud is not limited to a single server. With a cloud, networks of virtual and physical cloud servers host applications so that they are scalable and flexible, meeting the various needs of the user organisation.  This public infrastructure is provided typically by a third-party provider, where each enterprise or user has access to the cloud for their service needs. Although in each instance the customer’s usage is isolated and therefore data and information is kept private, the cloud infrastructure, bandwidth and system resources are shared.

What is Private Cloud Hosting? 

A private cloud, on the other hand, is a cloud application that belongs solely to the user organisation or customer. A business or organisation has exclusive access to cloud computing resources because it is physically located on-site in a data centre they own. Private cloud hosting, however, is where a private server is remotely hosted by a third-party service provider, where computing resources as provided through the third party data centre but remain exclusively available to the client or ‘single-tenant organisation’.

What’s the difference between a Private Hosted Cloud and a Private Cloud?

Private cloud hosting keeps the benefits of private clouds — namely, sole access to resources — but where they differ is that the hosted (sometimes called ‘managed’) cloud service cloud is maintained by a third-party according to the needs of the client enterprise. This third party can install hardware and offer initial maintenance of the cloud software. This is distinct from multi-tenancy organisation or ‘shared hosting’,  where many enterprises or organisations share the same architecture and services provided by a third-party host provider.

What are the advantages of Private Cloud Hosting?


Managed third-party solutions eliminate the need for enterprises to purchase the relevant hardware and software for their operations. Maintenance of infrastructure, data resources and storage is all carried out by the IT engineers employed by the host organisation. If data collection, storage and protection are all contained within the cloud infrastructure, the client is only required to purchase the amount of server capacity they use — allowing them to save funds for allocation elsewhere.


Often user organisations will be in the fluid stages of business growth. In these cases, they often encounter scenarios where they need to scale up their computing resources to accommodate and maintain an influx of revenue and business operations. Private cloud hosting brings the benefit of giving the choice of how many servers they want and the quantity of power they need to buy in order to configure their evolving capacity needs, as they do not have the same limits on physical hardware as dedicated servers. For small teams without specialised IT engineers, most managed cloud solutions will also deploy and maintain servers without the need for your involvement. 


Cloud computing enables any staff member in an organisation to access it from anywhere at a time of their choosing through the shared resource. The rise of remote working, and in turn the increase in productivity across numerous enterprises, has in large part been enabled by this increased availability of data which is only possible through cloud hosting solutions.

What are the disadvantages?

Data security

Although private cloud hosting is solely accessible by a single tenant organisation, it still runs on a multi-tenant platform. A consequence of this is the potential for compromise on security, as the responsibility for maintaining the safety of data is outsourced in some part to a third party. For larger organisations who require HIPAA or PCI compliance, authorities often mandate that an internal private cloud be used, as the client user retains full responsibility to meet these regulations — for example, through a high security firewall.


Since the cloud service provider owns the cloud infrastructure, the client organisation has less power over the systems. While the user can manage data and services that operate through the cloud hosting solution, they are unable to manage firmware, the server shell, or in fact gain any access to hardware at all.

What is a Dedicated Server?

Dedicated servers, like private clouds, are purchased or leased exclusively for a user enterprise. It is a private web hosting service, as the server hosts the applications or websites of a single tenant organisation which has full and unmediated access to server hardware. The resources contained by the server — such as RAM, bandwidth, storage and processor types — are also customisable.

The key difference that you may have already gathered is that these are physical servers and not cloud solutions, so it does not use virtualisation technology. These will typically be used by large organisations and businesses that have additional requirements such as high levels of data security or demand for server capacity. Since they are physical hardware, they require businesses to perform internal IT management, such as patches, upgrades and maintenance.

How does a Dedicated Server work?

A dedicated server is located offsite, and stores all computing resources on its infrastructure and hardware. Unlike virtual or public cloud solutions, the capabilities of a dedicated server are reliant on the specifications of this underlying physical hardware. As a consequence, their price varies — larger enterprises with high demand for data security or server volume often charge significantly more than their lower-capacity counterparts.

While they belong in a single data centre location, these are categorised in a tier-system that accounts for how many redundant systems are in place for power, backup power and cooling — the foundations of physical computing infrastructure. The number of redundant systems is directly related to the amount of availability (the probability that the system is operational at a given point). As a result many experts advise that an enterprise which depends on secure and reliable operating systems should select a minimum tier III server

What are the advantages?


Dedicated servers are often recommended to those enterprises who require high speed and intensive computer processing, as they are the most powerful single-server hosting options. Customers can directly access hardware, process data and receive information from a local server, and therefore operations are less vulnerable to lags. Dedicated hosting also enables user organisations to work more efficiently and reliably since they do not rely on the internet to provide data access through virtualisation.


With dedicated hosting, the single tenant organisation exercises full control over the server. This enables them to optimise components like storage, CPU and RAM, as well as supporting the choice of custom software and operating system (OS). Users are able to install a range of OS as per their business needs, from Red Hat Linux to macOS Sierra or Windows 10.


Larger companies and organisations that deal with highly sensitive data, such as government institutions or financial companies, often choose to protect this through strict security measures enabled by dedicated servers. This not only cuts out the need for uptime, it avoids the involvement of third parties which makes the information more vulnerable to a data breach. On the other hand, many point out that due to the security of a dedicated hosting server’s reliance  on the expertise of a skilled administrator, it serves to make overall security more vulnerable.

What are the disadvantages?


Although dedicated servers feature an abundance of inexpensive disk space, cheap bandwidth and SQL storage, the cost-effectiveness of this flexibility is outweighed by the initial capital expenditure — which can be steep. As we alluded to earlier, for larger organisations particularly in governmental or financial sectors, the demands of utmost data security and capacity come at the cost of high investments. 


Since a dedicated server is purchased by the client organisation, it requires self-management from either an internal or external IT team. This can create problems in terms of reliability, as if the server undergoes recovery, an individual engineer or IT professional must be on site to fix it. Consequently, client users need to invest time in preparing for availability issues like this.

Private Cloud vs. Dedicated Hosting: Final Thoughts

Both private cloud hosting and dedicated hosting services are used by a wide range of enterprises of varying sizes and requirements, both for front and back-end solutions. While dedicated hosting requires a steeper initial investment in the physical hardware, this may be a necessary capital expenditure — particularly if your organisation needs the highest possible security provisions. However, hosted environments may eliminate the costs of labour from a client’s IT department if their organisation is small, and do not require the top-end CPU power that dedicated servers provide. 

More enterprises are seeing the benefits of both solutions and consequently are turning to hybrid cloud systems so they can gain the best of both worlds. Redcentric has the knowledge and capability for a number of software and hardware solutions that suit our customer’s needs. We develop and implement cloud systems that we maintain and manage, updating our customers regularly and enabling them to stay ahead in the evolving landscape of cloud computing and data technology. Get in touch today to find out how we can develop a path for your business.

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