Why VPS Plans are Cheaper than Shared Hosting

Max Rozen, the author of this article
Max Rozen
@RozenMD

You might be looking around for a new web host, or trying to get a better deal. You notice VPS plans are incredibly cheap - as low as $3-5 per month, while the cheapest shared hosting is around $10 per month.

You wonder, "How is this possible?!" - especially when people recommend moving to a VPS once a site becomes popular.

Let's discuss what these are first, before going into why cheaper doesn't necessarily mean better for you and your business.

Table of Contents

What a VPS provides

VPS stands for Virtual Private Server. You typically get allocated a certain amount of CPU, RAM, Disk space, and bandwidth. Most providers let you pick the operating system, and you get admin access on that operating system.

Everything else, is up to you. This means:

  • Operating System updates
  • Security (managing non-root users)
  • Configuring, and updating the software you want to run (for WordPress, this also means configuring the database)

Access to your VPS is via SSH, and you use terminal commands to install what you need.

Essentially, you're only paying for exclusive access to the hardware, and bandwidth. The provider only ensures that your VPS stays up, and the network is working as expected.

What Shared Hosting provides

Shared Hosting provides you with pre-configured software, and some disk space for file storage. Depending on the provider, they'll also bundle in 24/7 Customer Support, CDN, SSL certificate, and domain management.

Access to your shared hosting is typically via some sort of admin panel, such as cPanel, and there's only so much configuration that's accessible to you as a user.

Hosting providers will rarely guarantee a certain amount of CPU/RAM. As a result, you'll find the more dodgy providers will attempt to run as many shared hosting plans on a single server as possible, while more reputable providers that have a reputation for fast and reliable shared hosting cap the number of sites running on a single server.

Why is a VPS cheaper than shared hosting

VPS plans offer limited customer support compared to shared hosting. As a result, a hosting provider is able to generate cash flow solely from keeping their hardware online.

In contrast, for shared hosting, a hosting provider also needs to pay for people to provide quality customer support, monitor the web servers and databases, and much more "keeping the lights on" type work. They typically pass on the additional costs, which is why shared hosting is more expensive than a VPS.

How to pick: VPS vs shared hosting

If you know your way around SSH, terminal commands, Linux in general, and don't want the provider's software to get in your way, chances are you'll want a VPS.

On the other hand, if you just want to get a website online, and are looking for a "set and forget" type solution, shared hosting is what you're looking for.

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