In some respects cloud servers work in the same way as physical servers but the functions they provide can be very different. When opting for cloud hosting, clients are renting virtual server space rather than renting or purchasing physical servers. They are often paid for by the hour depending on the capacity required at any particular time.
Traditionally there are two main options for hosting: shared hosting and dedicated hosting. Shared hosting is the cheaper option whereby servers are shared between the hosting provider's clients. One client's website will be hosted on the same server as websites belonging to other clients. This has several disadvantages including the fact that the setup is inflexible and cannot cope with a large amount of traffic. Dedicated hosting is a much more advanced form of hosting, whereby clients purchase whole physical servers. This means that the entire server is dedicated to them with no other clients sharing it. In some instances the client may utilise multiple servers which are all dedicated to their use. Dedicated servers allow for full control over hosting. The downside is that the required capacity needs to be predicted, with enough resource and processing power to cope with expected traffic levels. If this is underestimated then it can lead to a lack of necessary resource during busy periods, while overestimating it will mean paying for unnecessary capacity.
With cloud hosting clients get the best of both worlds. Resource can be scaled up or scaled down accordingly, making it more flexible and, therefore, more cost-effective. When there is more demand placed on the servers, capacity can be automatically increased to match that demand without this needing to be paid for on a permanent basis. This is akin to a heating bill; you access what you need, when you need it, and then only pay for what you've used afterwards.
Unlike dedicated servers, cloud servers can be run on a hypervisor. The role of a hypervisor is to control the capacity of operating systems so it is allocated where needed. With cloud hosting there are multiple cloud servers which are available to each particular client. This allows computing resource to be dedicated to a particular client if and when it is necessary. Where there is a spike in traffic, additional capacity will be temporarily accessed by a website, for example, until it is no longer required. Cloud servers also offer more redundancy. If one server fails, others will take its place.
Below are the key benefits of cloud servers:
Flexibility and scalability; extra resource can be accessed as and when required
Cost-effectiveness; whilst being available when needed, clients only pay for what they are using at a particular time
Ease of set up; Cloud servers do not require much initial setup
Reliability; due to the number of available servers, if there are problems with some, the resource will be shifted so that clients are unaffected.