What is cloud hosting and what are the benefits?

Cloud hosting is a type of hosting in which IT resources such as storage, computing power, and applications are provided flexibly via a network of interconnected servers. Over time, various hosting models have emerged, each suited to different use cases.

Introduction to cloud hosting

What is the difference between web hosting and cloud hosting?

In general, hosting models can be grouped into two main categories: server (web hosting) and cloud hosting. With serving hosting, a customer rents IT resources for a monthly fee, with different plans offering different levels of performance. This option allows customers to rent a physical server for their exclusive use. It’s also possible to share the computing resources of a physical server with other customers. The first option is known as dedicated server hosting, while the latter is referred to as virtual server hosting.

However, not every company is looking to launch complex web projects with predictable resource demands. Dedicated server hosting often fails to meet the needs of modern IT, which must be able to react quickly and efficiently to changing requirements. A more flexible option, such as cloud hosting, can provide an effective solution. This hosting model works similarly to virtual server hosting but differs in that a virtual server can be distributed across multiple physical servers. In addition, cloud hosting is typically billed by the minute, offering a greater degree of flexibility and scalability—significant advantages over traditional web hosting models.

How does cloud hosting work?

Like virtual web hosting, cloud hosting is also based on virtualization, a process where multiple virtual servers share a physical server. With virtual web hosting, there is one physical server for a number of virtual servers. As such, they cannot be distributed across multiple servers and locations. With cloud hosting, virtual servers are able to access the resources of multiple virtual machines that are hosted on different computers. This makes it possible for an application to be distributed across a cluster of interconnected servers that provide IT resources on demand.

What types of cloud hosting are there?

Similar to web hosting, cloud hosting models can also be divided into several cloud architecture models. The models are grouped according to how tasks are divided amongst the customer and the hosting provider.

• Public cloud: The public cloud is a hosting model where the hosting provider provides the hardware and takes care of the maintenance and availability.
• Private cloud: In a private cloud, all tasks and costs are taken care of by the company itself. This type of cloud is especially relevant for large enterprises and is referred to as an internal cloud or a corporate cloud. In this model, the cloud infrastructure is not rented from a hosting provider. This model is particularly relevant for large enterprises.
• Hybrid cloud: As the name suggests, a hybrid cloud is a combination of the two models above. For example, there might be a traditional on-premises cloud data center that is integrated with an external public cloud. Naturally, this model offers a wide range of options for individual customization.
• Managed cloud: A managed cloud is most similar to a public cloud. In addition to maintaining and providing hardware, the hosting provider also takes care of operational processes (such as monitoring and security) and application software. This is particularly beneficial for customers who want to focus on their core business operations.

What are the benefits of cloud hosting?

1. Cost reduction

Of course, the biggest advantage of a flexible cloud hosting service is the immense reduction in costs. Rather than having to invest in in-house IT infrastructure, cloud computing provides the opportunity to cost-effectively meet the resource requirements of new projects using virtualized servers. With cloud hosting, customers only pay for the resources they actually use, thanks to per-minute billing. This is in stark contrast to traditional web hosting models, which often involve ongoing fixed costs—even when the server is barely used. Additionally, the effort required for maintenance, repairs, and inventory management of the in-house IT infrastructure is significantly reduced, as most of the necessary hardware is typically provided by the hosting provider.

Cloud hosting also enables smaller businesses to access IT resources that were previously available only to large enterprises. This is why cloud technologies have become increasingly popular among small and medium-sized businesses. For startups, the cloud makes it easier to enter IT-intensive business sectors.

2. Flexibility and scalability

Through virtualization, cloud hosting offers the flexibility needed to promptly adapt IT resources to a business’s demands. This is of particular importance for web projects with fluctuating traffic. If, for example, the traffic in an online shop increases tenfold due to seasonal business, the performance features of a cloud server (such as RAM, CPU and online storage) can be expanded with just a few clicks.

It is important to note that projects that are constantly growing can also benefit from the cloud hosting model too. If a web project exceeds the peak performance of the dedicated server it is relying on, migrating to a new server will be inevitable. With cloud servers, on the other hand, additional resources can be added any time as needed. This is made possible by virtualization based on a network of closely interconnected server clusters. Instead of being located on a single physical machine, data is distributed across several servers. When demand decreases, the added capacities can be reduced straight away and as a result, idle capacity charges are avoided.

More and more cloud providers are also integrating artificial intelligence into their services to make operations smarter and more efficient. AI-based systems analyze user behavior or usage patterns to automatically scale resources, predict outages, or detect security threats early. Even backup strategies, access rights, and update schedules can be managed proactively and automatically thanks to AI. As a result, companies benefit not only from scalability, but also from a self-optimizing infrastructure that further reduces administrative overhead.

3. Shortened development cycles

The cloud’s flexibility is particularly advantageous for startups and development departments of bigger companies. Investment costs for pilot projects remain manageable since the required resources are readily available. Furthermore, new applications can be tested and marketed substantially faster. Instead of assigning the time-consuming and costly task of purchasing new hardware to an IT team, cloud hosting offers developers the opportunity to generate any number of test servers with individually scalable performance features in the virtual environment.

Cloud hosting’s redundant server architecture also means users benefit from backups, ensuring that various development stages of a web project are retrievable. All of this results in reduced development cycles, securing not only a competitive advantage for companies but significantly cutting down on costs as well.

4. Data security and availability

Since the IT resources of a cloud server are provided by a number of physical machines, cloud hosting users benefit from comprehensive server hardware redundancy. This ensures that more than one backup copy of data is stored on the servers in the data center at any given time. Potential failures of any hardware components, such as a hard drive crashing, have no impact on data security or the availability of the provided resources.

For medium-sized businesses, outsourcing IT services also offers the advantage of accessing technical methods and security procedures that would be difficult to implement in-house. However, providing server hardware resources also involves legal requirements for hosting providers. Specialized web hosting providers continuously invest in ensuring data security in compliance with national regulations and international standards.

Today, the physical location of data storage has also become a key consideration. Providers operating data centers in Germany or the EU can more easily meet regulations such as the GDPR, BSI baseline protection, or ISO 27001. For U.S.-based businesses, it’s important to ensure that providers also comply with relevant U.S. data protection standards, such as HIPAA (for health data) or the California Consumer Privacy Act (CCPA), depending on the type of data and jurisdiction.

What are the environmental benefits of cloud hosting?

Cloud hosting not only offers businesses immense advantages; the environment also profits from the shared usage of individual components of IT infrastructure. Data centers that are designed for providing cloud servers have far more effective processes for power supply, ventilation and fire safety than those available in an in-house server room. Furthermore, many hosting providers use climate-neutral electricity and renewable energy for the maintenance of their data centers.

Cloud hosting meets cloud native

For many companies, cloud hosting serves as the foundation for a cloud-native IT strategy. Cloud native means that applications are developed from the ground up to fully leverage the advantages offered by the cloud. In this context, technologies such as containerization with Docker, orchestration with Kubernetes, as well as continuous integration and continuous delivery play a central role.