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Shared Hosting
This is the most basic and the most inexpensive of hosting alternatives. With shared hosting, numerous customers host their websites or applications on the same server, sharing the cost of an Internet connection that's generally faster and more secure than dial-up connections. Because the resource is shared, server performance is impacted and security is easier to compromise.
Things to consider
While economically attractive, this type of hosting typically cannot handle large amounts of storage or traffic and the provider offers little to no IT services or flexibility. For this reason, shared hosting is often most popular for organizations with non-mission critical IT needs.
Cloud Hosting
The Cloud is a type of hosting architecture that allows computing resources to be consumed as a service via the Internet. Typically, cloud environments are able add or even remove resources like CPU cycles and memory and network storage as needed. Even Infrastructure services like load balancing and traffic shaping, security, intelligent caching along with dedicated computing platforms for performance analysis, monitoring and reporting scale with the environment.
The bottom line is that cloud architectures have the ability scale to suit user demand and traffic spikes quickly. Developers don't have to constantly re-engineer their environment and cost structures to handle peak loads. Businesses don't have to wrestling with the underlying infrastructure and core technologies or the day-to-day operational, performance and scalability issues of their platform. Instead, they can truly focus their resources on developing their applications and sites.
Things to consider
While a cost-effective and easy-to-use solution for certain needs, it's important that you consider a proven cloud hosting provider that has a stable infrastructure due to the relative "newness" of this type of hosting.