If you have been researching website servers for businesses and larger web enterprises, you’ve undoubtedly heard the buzz about cloud hosting. Cloud hosting is the website server aspect of cloud computing. And it’s being seen as a gamechanger for a few reasons.

The Achille’s heel of any website server is unpredictability. For most website server and hosting packages, you purchase a certain amount of storage space and bandwidth to handle your anticipated traffic load. But what happens when your hit video goes viral? Or what happens when your business gets featured on national news and you suddenly experience millions of more hits and visitors than you are prepared for?

The result, more often than not, is overload. And this can have two dire consequences: (1) your website server company dings you with penalties for going over your allotted data transfer allotment or (2) your website server goes down and all those millions of potential new customers are greeted with an error message.

In either case, it amounts to lost profits and missed opportunities.

Enter: cloud hosting. Cloud hosting is a flexible solution for two of the biggest challenges faced by website servers: scalability and deployability. In a nutshell, cloud hosting is designed to give you lots of processing power, bandwidth and storage space when you need it and only a little when you don’t. This usually evens out to be more cost-effective for website owners. The metaphor often drawn is that it’s like paying for a cab ride, rather than buying a car. Or, more aptly, chartering a bus instead of buying ten cars.

How Cloud Hosting Works

Cloud computing is a bit technical to explain, but for practical purposes, here’s how it works:

With a dedicated website server or a shared website server, your physical data sits in a single server in a single physical location. Anyone who wants to access your web page has to interface with that one machine. Your server has a certain amount of capacity in terms of how much physical memory storage there is and how many users can be connected to your website at one time. In most cases, you’ll have more than you need at any given time. But if your traffic starts picking up, you’ll have to upgrade. This means either installing more hardware onto your rack or migrating your website onto a bigger, more powerful website server. This is costly and takes time.

With cloud hosting, on the other hand, your website does not have a physical claim to any hardware or location. Rather, a cloud host is like a pooled resource of processors, hard disks, file services and other web services. You can draw upon these resources on an as needed basis. They are always there if you need them, and when they are not, you don’t pay for them. In a sense, it’s a bit like being hooked up to the public utilities and having water, gas and electricity pumped to your house as needed, rather than stockpiling your own gas, private well and generator.

Costs: Cloud Hosting vs. Dedicated Servers

Depending on the size of your business and how you use cloud hosting, cloud hosting may save you money over a dedicated server. Most cloud hosting website servers follow a utility-based pricing structure. This is in contrast to a dedicated server, where you pay a flat monthly fee for a certain allotment of storage and bandwidth. With cloud hosting, your monthly billing is flexible and commensurate with your usage. If you have more traffic one month, then you’ll pay more. If you reduce your bandwidth—either by having less traffic or optimizing your website—you’ll pay less.

For the average website with steady, predictable traffic, cloud hosting usually is not cost competitive. But for sites that regularly, yet unpredictably, experience massive spikes in traffic, cloud hosting can save a significant amount of money.

Cloud Hosting: Is it Secure? Is it Reliable?

Most people who are new to cloud hosting have questions about the reliability and security of cloud hosting. After all, you are, in a sense, relinquishing some control over where your data ends up. Just as a hacker may have access to other accounts after exploiting a security loophole in a shared website server, so too would the liabilities be increased for cloud hosting, the rationale goes. With a dedicated server, keeping unwanted visitors out of your secure files is mostly a matter of installing a firewall. But with cloud hosting, where files regularly leap from machine-to-machine through the vast networked cloud, firewalls are not viable. Instead, ensuring security of your files falls upon your host and their internal controls for authorizations and user level access. So far, the track record for cloud hosting has been very good—but security experts remain wary and discussions on the security and reliability of the cloud continue.

Is Cloud Hosting Right for Me?

This is another tough question. The best way to understand if cloud hosting is cost-effective solution for you is to approach a couple different hosts and ask them to crunch the numbers and make a case. In general, if you don’t feel like you have a need for a solution—i.e. you do not find yourself struggling with scalability and tackling traffic spikes—then you may not need cloud computing. But if you are looking for a flexible solution, cloud hosting may work for you. We recommend looking into offers from a couple different types of website server companies—including grid hosting, cloud hosting, shared hosting, virtual private server hosting, content delivery networks and others. Each has a different set of pros and cons which will apply differently to your needs.