Virtualization is the technology behind VPS's. Hypervisor software takes the physical resources of a server and divide them up so that virtual environments can use them. It simulates a physical server environment to the operating system it runs and the end user faces this interface as it's a real server.
With the virtualization revolution, the cost of renting a private server reduced quite a bit. With the constant decline of prices for hardware, more and more companies are able to provide VPS hosting at a low cost. Many people are looking for VPS services with the idea that cheap is bad. They think that if it is cheap, then it must be unreliable and not up to their standards. The truth is, cheap VPS services can still be reliable and save you a lot of money while performing just like an expensive VPS.
There are some challenges for a web hosting company to be able to offer a VPS at an affordable cost while keeping its services reliable and enterprise ready.
Owning some or all of the infrastructure can help an organization maintain lower recurring costs in the long term, as it is cheaper than leasing. At first this means that companies will have to spend more money on these items but they are able to make larger profits later on because their expenditures are smaller and predictable.
Another expensive asset which increases the costs is IP address space. IP addresses are a limited supply. Like any limited supply in the world, their prices are going up each day. If the hosting company is not renting someone else's IP space, they are going to get affected by the increased costs over time.
The software used to provide the VPS hosting service is another important expense which affects the prices. Licensing costs of such software can really set a provider back and add up in costs to pass to its customers. To help with on-going costs, a company save a lot by maintaining this software in-house built on top of an open source software. This way the company can both help the improvement of the open source software while increasing their reputation by offering more advanced features to their customers. This allows them to offer cheaper services than potential competitors who have to pay on-going licensing costs for the software.
Manual labor is the most expensive part of a company who offers VPS to its customers. To avoid doing manual labor, the company should work on having most of its operations automated. Installing and configuring of a VPS host system, when done manually takes hours, while having an automated software do it would only take a few minutes and will save the company costs of having this done by a human.
The key to provide reliable VPS services is having a smoothly running infrastructure. The hypervisors should be running problem-free and all the issues arise should be taken care of as soon as possible. The systems should not be over-loaded and avoid causing performance issues to the customers. All of this when done with hand would take a lot of resources. When automated monitoring of the systems is utilized, it may save a lot of time and money for the business while also ensuring that the infrastructure is always healthy.
As you can see, when done right, a cheap VPS can be perfectly reliable and help you save a lot of costs. Of course this can be accomplished by a properly managed company with ample capital and highly skilled staff, as well as a software development department that is entirely dedicated to developing solutions.
For the past 8 years, we at VPSDime have been living proof of it. All of our VPS plans are affordable, highly available and optimized for speed.
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