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Are dedicated hosting yet cheaper and would remain so ? Do they really going to survive as cloud based offering are also getting cheaper day by day ? I am asking to gain perspective of long term scenario in hosting space as well as to know what is the current situation.

Everywhere I go there is this buzzword "cloud" and audience don't even bother to compare it with dedicated hosting options. Is cloud really the way to go ahead ? what are it's cons ?

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I'm not very familiar with how could/VPS hosting assign IPs but if there's even a tiny probability you'd end up sharing an IP with another site, go dedicated. The web is full of horror stories about people having perfectly legitimate websites being blacklisted from browsers because rogue/shaddy sites on sites accessibles from the same IP... This is the surest way to kill a public facing website. –  Cedric Martin Nov 6 '11 at 16:40
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I can offer you our experience at Cobase (www.cobase.eu). We decided to go for dedicated hosting for two major reasons:

  1. You can control your network. With dedicated hosting, we could set up a number of servers, each with a specialised role (web server, database server, backup server, archival server), the corresponding balancing services, and the backing communications infrastructure. This network is kept private and does not face the Internet, and can be expanded as the hosted application needs to scale. Thanks to dedicated hosting, we keep very fine degree of control over which servers we add, how they talk to each other, and what software they run.
  2. Users' perception about their data. Since our application is storing many GBs of extremely valuable data from multimillion-euro projects for which our clients trust us, we need to ensure that this data stays available, safe and secure. We found that cloud-based technologies are often perceived by users as "fuzzier" in this regard (with or without reason), so dedicated hosting helps us to create a warm feeling (backed by a true and trusted reality, of course).

This article may shed some additional light of a feature that our application implements, and that would have been much more complex (and perhaps less reliable) if it were cloud-based.

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