Dedicated server or cloud server? - Advantages in comparison

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Illustration showing the difference between dedicated and cloud server

Author: Simon Kilchmann

Category: IT infrastructure / Cloud

May 18, 2020

Company size, mission, industry, the scope of the project, and the portfolio all play an important role in providing the appropriate IT infrastructure.

While stability, reliability, and security of the IT infrastructure are must-have criteria, the requirements for scalability, flexibility, and cost efficiency often differ massively. Sooner or later, most SMEs and start-ups are faced with the decision of whether dedicated servers or cloud servers will best support them in achieving their business goals.

When choosing the appropriate server infrastructure, the costs for the server must not be neglected. At this point, we will first discuss what dedicated and cloud-based servers are, then summarise the areas of application of dedicated and cloud servers, followed by a comparison of the server types. In addition, it will be shown how much dedicated and cloud-based servers cost.

What is a Dedicated Server?

A dedicated server is a stand-alone physical server that is used only by a company or for a specific purpose. A dedicated server is used only by one company or only for a specific purpose. For example, a company can run its online shop on a dedicated server, all other applications run on other servers.

Sole use allows the company to use the entire technical performance of the server, such as RAM, hard disk capacity, CPU performance and network bandwidth, solely for its projects.

What is Cloud Server?

A cloud-based server or cloud server is a virtual server that is located in a physical data centre. An external partner takes care of the provision of cloud hosting and provides customers with the necessary resources.

In this blog post, you'll learn whether a cloud-based or dedicated server is better suited for SMEs and growing start-ups, and where your websites, online stores, or blogs are best located.

These are the fields of application for dedicated and cloud-based servers

As mentioned above, several company- and industry-specific factors must be taken into account when choosing the appropriate server.

How big is the online project? Is the IT infrastructure to be expanded and extended in the foreseeable future? Do adjustments have to be made regularly? Are there load peaks? What about the IT budget? Companies need to answer these questions before choosing the right server model.

Here is a brief summary of the cases in which companies should rely on dedicated or cloud-based servers.

Dedicated servers

When managing a dedicated server, the operator is completely free to decide on the software used. Since dedicated servers are only used by a single company, no other users can cause failures or downtime.

It is also assumed that dedicated servers are advantageous in the field of search engine optimisation. Since the server has its own IP address and no other companies or projects are hosted on the same server, a signal of higher quality is sent to the Google search engine.

A dedicated server is always worthwhile if an extensive online project is to be realised or a service central to the company's continued existence is to be operated. Dedicated servers make sense for online shops with a high volume of visitors or a large selection of products, as well as community platforms such as busy forums.

Cloud Server Illustration

cloud server

Application and IT environment requirements can change quickly, especially in growing start-ups and SMEs, depending on the order situation or team development. One of the biggest advantages of cloud-based servers is their high scalability: if a small business grows into a medium-sized enterprise, there is no need to purchase new servers and software at every milestone.

With cloud servers, more computing power can be activated within minutes. In addition, the rented cloud resources can be accessed from anywhere in the world, the only requirement is an internet connection.

The possibility to work remotely can be a great advantage when recruiting new employees. In surveys conducted years before the outbreak of the pandemic, many digital natives said that flexible working hours and the possibility of remote working played a non-negligible role in their choice of employer.

In addition to scalability and flexibility, cost savings are often the main reason why smaller and growing businesses opt for cloud migrations, as cloud storage space is often billed monthly and therefore no large upfront payments need to be made.

Thanks to an attractive pay-as-you-go payment model, only the resources actually used are paid for with a cloud server. Instead of stockpiling performance in your own server room and having little leeway for expansion, you can obtain customised services from an external provider.

Last but not least, an increase in efficiency can be achieved by eliminating waiting or delivery times and allowing employees to provision the servers at any time of the day or night. The purchase of cloud server services from an external partner and the monthly billing according to effective use allow flexibility and protect the budget.

The external partner also takes responsibility for software and hardware and carries out regular patching of the systems, which minimises security risks and ensures the best possible functioning of the systems. This eliminates the need to recruit IT talent, which is often very costly in terms of time and money.

5 reasons why you need a Dedicated Server in Switzerland

Comparison of dedicated and cloud-based servers

You should use dedicated servers if your online project involves an excessive number of computationally intensive tasks in a small time window. This can be websites or platforms that, like ticket sellers in pre-pandemic times at the start of sales of concert tickets for popular bands, expect an extremely large number of accesses within a few minutes, have a complex administrative structure or where there are regularly many simultaneous database queries.

Depending on the size of the web project, dedicated servers with Quad Core, Eight Core or Twelve Core are recommended. The designations are based on the number of CPU cores and four cores ("Quad Cores") are sufficient as entry-level servers for Windows and Linux environments, while 8 cores are recommended for small virtualisation environments and database servers of small or medium size and 12 cores for demanding virtualisation environments and extensive databases.

Here is an overview of the most popular dedicated server models for SMEs and growing start-ups:

Dedicated: Quad Core Dedicated: Eight Core Dedicated: Twelve Core
Intel Xeon E3 3.1 GHz, 4 CPU cores Intel Xeon E5 2.1 GHz, 8 CPU cores / 16 threads Intel Xeon E5 2.1 GHz, 12 CPU cores / 24 threads
Linux, Windows, VMWare Linux, Windows, VMWare Linux, Windows, VMWare
8-64 GB ECC RAM, HDD and/or SSD, Soft- or HW-RAID, 100Mbit to 1Gbit uplink 8-512 GB ECC DDR4 RAM, HDD and/or SSD, Soft or HW-RAID, 100Mbit to 1Gbit uplink 8-512 GB ECC DDR4 RAM, HDD and/or SSD, Soft or HW-RAID, 100Mbit to 10Gbit uplink
99.9 percent network availability, web-based IPMI console 99.9 percent network availability, web-based IPMI console 99.9 percent network availability, web-based IPMI console
Setup: 1 to 3 days Setup: 1 to 3 days Setup: 1 to 3 days
Contract period: 1 month Contract period: 1 month Contract period: 1 month
from 129.00 CHF from 189.00 CHF from 309.00 CHF

Due to the high scalability, cloud-based servers are suitable for SMEs and growingcompanies that want to expand their customer base or portfolio in the foreseeable future.

The IT infrastructure can be expanded at the click of a mouse. Servers in the cloud can be configured within minutes and are provided without a setup fee. Cloud storage space is often billed monthly and is therefore the best option for start-ups and growing businesses that cannot or do not want to make huge upfront payments.

For example, the following cloud servers are very popular with SMEs and start-ups on an expansion course.

Below is a comparison of the most important features of dedicated and cloud-based servers:

Dedicated server cloud based server
  • Ideal for larger virtualization environments and database servers
  • Ideal for SMEs and growing start-ups where flexibility and cost efficiency are key
  • Scales need lead time
  • high scalability, the IT infrastructure can be expanded at the click of a mouse
  • Setup: 1 to 3 days
  • Setup: within minutes
  • Setup fee: Depending on the contract period
  • Setup Fee: None
  • Minimum contract duration: 1 month
  • Minimum contract duration: none

With both a dedicated and a cloud-based server, the location of the data centres plays an important role: access to data, as practised for example by US companies without judicial control by means of the American Patriot Act, is not permitted in Switzerland. Local providers comply with Swiss data protection laws and can thus guarantee the highest data security standards.


The use of a dedicated server makes sense above all if an extensive project is to be realised or a service that is central to the company's continued existence, such as an online shop, community platform or booking platform, is to be operated and high computing power is required. Cloud hosting, on the other hand, is the ideal solution for cost-conscious SMEs that want to reduce their IT expenditure and increase efficiency at the same time. With cloud-based servers, SMEs can obtain high-quality services at a reasonable price.

Local IT infrastructure providers will assess the individual needs of their clients in a face-to-face meeting. Taking into account the requirements of your IT infrastructure and the human and financial resources, the external partner can propose an SLA model that supports your IT department in the best possible way.


Simon Kilchmann

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