Physical vs. Cloud-based Servers: What’s The Difference?

In this article, we outline the pros and cons of physical and cloud-based servers. With the knowledge we provide, you’ll be able to determine which server is the best fit for your business. To begin, let’s review some basics.

What is a server?

A server is a computer that provides data to other computers on a network. Any type of computer can be made into a server; however, most businesses use rack-mountable hardware that is built for high demand.

What is a physical server?

A physical server is kept on-site, typically in a closet or otherwise in the office where business takes place.

What is a cloud-based server?

A cloud-based server is virtually hosted using cloud computing. In other words, the server does is not kept in the office. Instead, it is connected to the network over the internet.

Now that we’ve established the basics, it’s time to compare both servers apples-to-apples. We’ve chosen four key elements that are important to most businesses: cost, cyber-security, scalability and consistency.

Physical Server


Physical servers have more upfront costs than cloud-based servers. Business owners will have to pay for hardware, software, installation and maintenance.


Physical servers provide more control over data security than cloud-based servers. With physical servers, security protocols can be adjusted and implemented manually, allowing for greater customization.

While you might not have the expertise to do this yourself, your IT MSP will be able to tailor your cyber security to your individual needs.


With physical servers, both manual labor and hardware/software upgrades are required to scale with your business.


Physical servers are not reliant on a stable internet connection to function, making them somewhat more reliable than cloud-based servers.

Cloud-based Server


Cloud-based servers are usually paid for monthly. Additionally, cloud-based servers have fewer upfront costs and maintenance expenses.


Cloud-based servers usually rely on third-party security that is often automated. While this form of protection is faster and easier to set up, it does not necessarily offer the same amount of customization that a physical server would have.


Cloud-based servers are easier to scale. For additional monthly cost, you can easily expand your storage without purchasing new hardware.


Cloud-based servers rely on a stable internet connection to operate successfully.

Hybrid Solution

It’s possible to use a combination of physical and cloud-based servers, taking advantage of the benefits of both options. For example, your business can house a physical server to protect critical data while also utilizing a cloud-based server for increased flexibility.

Making a Decision

Ultimately, it’s up to you to decide which server best suits the needs of your business. If you’d like professional input, consult with an IT managed service provider (IT MSP). They’ll be able to determine the right solution for your business and handle the setup and maintenance required.

 No matter your preference, Peformance Connectivity is here to help you make the best decision for your business. Our knowledgeable team of IT professionals can answer any questions you may have, and our reliable performance solutions ensure you get the most out of your server.



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