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Updated Nov 13, 2023

What is Cloud Hosting?

Cloud hosting provides website hosting and data storage without relying on server equipment.

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Bassam Kaado, Business Ownership Insider and Senior Writer
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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We’ve all heard the adage that NASA needed a room full of computers to put a person on the moon, but that power can’t compare to the computing resources on a modern smartphone. Technology’s progression is relentless, significantly impacting how we live and conduct business. 

The advent of cloud computing – delivering computing services over the internet – has changed data storage, processing and collaboration for small businesses. In particular, cloud hosting has changed how businesses operate and manage their websites. We’ll explore how cloud hosting works and how cloud hosting solutions can benefit your business. 

What is cloud hosting?

Cloud hosting allows organizations to outsource their website’s computing and storage resources to a third-party provider. In cloud hosting, a network of virtual and physical cloud services supports a business website’s computing and data storage needs. 

While traditional computing uses on-site servers, cloud hosting handles computer system resources and storage, freeing users from reliance on physical equipment. Additionally, cloud hosting doesn’t require active management, freeing a business’s resources to focus on growth and operations. 

Cloud hosting is a reliable and effective resource that’s accessible, cost-effective and scalable.

Did You Know?Did you know
Cloud and data center solutions are similar but have distinct differences. A cloud-hosted system has potentially unlimited capacity, while you'd have to purchase and install more equipment to increase a data center's capacity.

How does cloud hosting work?

Cloud hosting technology splits a physical server into multiple virtual machines. Management software – called a hypervisor – is installed on physical servers to connect them and create virtual servers, also called cloud servers. These virtual resources can be automated and delivered over the cloud for shared use in a single organization or across multiple organizations. 

Each server in a cloud setting carries out specific tasks. For example, if a cloud service hosts your business website, if one server fails, another server will step in as a backup to ensure its ongoing availability. The cloud host distributes your website’s information through numerous redundancies to ensure it’s always available online for both you and your website visitors.

There are four primary cloud host categories: 

  • IaaS: Under the IaaS umbrella, users receive the virtualized hardware resources needed to install their own software environment.
  • PaaS: On the PaaS side, users are provided with a software environment through which they can install and develop web applications more quickly.
  • Serverless computing: Serverless computing isn’t fully server-independent. Serverless computing still requires servers to run the code to make it work. What makes it “serverless” is the ability for developers to build applications faster by eliminating the need for them to manage infrastructure.
  • SaaS: SaaS is a software delivery method through which the end user can access and use an application remotely via internet browsers. A vendor houses and maintains the hardware that runs the application.
Did You Know?Did you know
BaaS (backend as a service) is another cloud framework that connects mobile apps to cloud-based services.

How can you put cloud hosting into action?

Cloud hosting typically includes all necessary elements of website management, including cloud storage and database management tools. Many services are designed with nontechnical users in mind, offering control panels and dashboards with numerous features that make creating and managing a website seamless. Through cloud hosting, you can manage your domains, set up FTP accounts for remote file transfers, edit databases directly and perform various other functions.

For example, say you want to build a business website as an online portfolio of your accomplishments. You’ll have many tasks, including the following: 

  • Buying a server
  • Installing the correct software
  • Learning how to manage your server 
  • Ensuring your website’s ongoing accessibility

Costs could run into the thousands. However, if you opt for cloud hosting, you’ll pay a monthly fee of less than $10 to ensure your website’s ongoing availability to the public. You’d just have to upload your website files to your host’s servers, and it will be ready for public use.

TipTip
Pay close attention to your website's landing page. A landing page persuades users to engage with a business by purchasing a product or service, registering for an event, downloading information, or joining an email list.

How does cloud hosting compare to dedicated servers and VPSs?

Cloud hosting, dedicated servers and virtual private servers have distinct advantages and disadvantages:

  • Cloud hosting: Cloud hosting describes a shared-resource approach to website hosting. Your website is stored remotely and utilizes the hosting service’s resources. However, you share a resource pool with many other websites and cloud-hosting users. This can decrease website performance if another site requires more server activity.
  • Dedicated servers: Dedicated servers dedicate resources specifically for your use. Leasing a dedicated server allocates a specific amount of bandwidth and hardware capacity to your cloud hosting. Everything works the same as with cloud hosting and the tools for managing and maintaining your website. The only difference is that you have your own server that you aren’t sharing with any other users. A dedicated server can be costly and more complex to set up and use. 
  • Virtual private servers (VPSs): If you don’t have the budget or traffic to justify leasing a dedicated server, consider leasing a VPS. A VPS utilizes a mixture of dedicated and shared servers, helping provide resources to customers while keeping pricing on the lower side. Specifically, a single server is partitioned into multiple virtual servers, and you can lease one for a low monthly rate. Each VPS functions like a small server, dedicating specific resources to your hosting without the decreased performance associated with standard cloud hosting.
Did You Know?Did you know
Virtualization and cloud computing are often used interchangeably. However, virtualization is the fundamental technology that powers cloud computing, while cloud computing enables users to access shared resources.

What are the benefits of cloud hosting?

Cloud hosting offers a wide range of benefits, including the following:

  • Cloud hosting is reliable. As opposed to the ever-present possibility of failure with in-house hardware, cloud hosting takes place in an off-site data center comprising hundreds of servers with multiple redundancies. This protects against failures and ensures ongoing availability.
  • Cloud hosting offers physical security. The data centers where servers are stored typically have multiple security measures in place, including ID card scanners and security cameras. These measures prevent unauthorized individuals from accessing or disrupting servers.
  • Cloud hosting brings scalability and flexibility. The resources provided in a cloud host setting can easily scale to a business’s needs and aren’t limited to the physical constraints of a single server. If your site experiences moments of extra traffic, the cloud hosting service can easily borrow unused resources from additional servers.
  • Cloud hosting is affordable. You pay only for the resources you use; you’re not dealing with in-house servers that aren’t being used to their fullest extent.

Cloud hosting solutions

There are many cloud hosting providers, each with its own range of features and functionalities for both nontechnical and technical users. The best web hosting services offer flexibility, accessibility, security, optimal data storage and excellent site speed. Determine your business’s needs and priorities, and find a web host to best serve you. 

Some established names in the web hosting industry include Just Host, GoDaddy and iPage. Each offers competitive monthly prices and a wide range of features to increase the value of their service.  

More web host options to consider include the following: 

  • Bluehost: Bluehost provides shared hosting, VPSs, dedicated servers and WordPress hosting with various pricing plans. 
  • IONOS: IONOS is a scalable platform ideal for growing businesses or startups that aren’t sure how much digital space they’ll need.
  • InMotion Hosting: InMotion Hosting is our pick as the best web host for small businesses. It also offers VPSs, dedicated servers and managed hosting options.
  • A2 Hosting: A2 Hosting is our pick as the most secure web host. It offers managed WordPress services and other web hosting options.

Cloud hosting helps every business compete

Cloud hosting will continue to be a dynamic industry. Big-name companies like Google, Microsoft and Amazon have gotten involved in the industry, and various smaller businesses are competing. Thankfully, your small business can avail itself of quality web hosting services regardless of size or needs. 

Ryan Goodrich contributed to the reporting and writing in this article. 

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Bassam Kaado, Business Ownership Insider and Senior Writer
Bassam Kaado is a marketing and PR maven with his own small firm focused on data management, lead tracking, brand management, and traditional and digital marketing strategies. He spends his days helping businesses in a variety of sectors sharpen their brand identity, raise awareness and improve conversion. Over the years, Kaado has mastered internal and external communication strategies across industries, studied the ins and outs of media relations and uncovered the secrets of successful social media and email campaigns. Kaado holds a communication degree from Rutgers and credentials in B2B marketing and using social media for business growth
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