VPS vs Shared Hosting vs Managed Services - When to Choose What

Your side project just went viral on Reddit. Traffic spikes 50x overnight. Your shared hosting craps out, Vercel bill hits $500, or your misconfigured VPS gets hammered by a DDoS attack you can’t handle. Pick the wrong hosting and you’re either bleeding money or scrambling to migrate during your biggest opportunity.

Real Cost Breakdown

Let’s cut the marketing BS and look at actual numbers for a typical web app serving 100k page views per month:

Shared Hosting: $3-15/month

Example: Namecheap Shared ($3/month)

• Traffic limits: 50k-100k visits/month before throttling
• Storage: 20GB-unlimited (marketing lies - it’s throttled)
• Performance: 2-5 second load times, shared resources
• Hidden costs: SSL cert ($9/year), backups ($2/month), staging environment (not available)
• Real monthly cost: $6-12 with necessary add-ons

VPS: $4-20/month

Example: Hetzner CAX11 ($3.99/month) - ARM64

• Resources: 2 vCPUs (ARM64), 4GB RAM, 40GB NVMe SSD
• Traffic: 20TB bandwidth included
• Performance: Sub-1 second load times with ARM efficiency
• Hidden costs: IPv4 address ($0.60/month), your time (4-8 hours initial setup, 2 hours/month maintenance)
• Real monthly cost: $4.59 + your hourly rate for management

Managed Services: $20-500+/month

Examples: Vercel Pro ($20/month), Railway ($5-50/month)

• Vercel Pro: $20/month + $40 per 100GB bandwidth + $2 per additional team member
• Railway: Pay-per-usage, typically $10-30/month for small apps
• Performance: Excellent (global CDN, edge functions)
• Hidden costs: Function execution fees, bandwidth overages, vendor lock-in
• Real monthly cost: $25-100 for most apps, $200-500 at scale

When to Choose What

Stop overthinking. Here’s your decision matrix:

Choose Shared Hosting When:

• Budget: Under $10/month total
• Traffic: Small personal projects, early stage apps
• Technical skill: You just want it to work
• Time available: Zero for server management
• Project type: Simple WordPress sites, landing pages, basic PHP apps

Red flags: You need staging environments, custom server configs, or expect traffic spikes.

Choose VPS When:

• Budget: $5-20/month is comfortable (including IPv4 costs)
• Traffic: Growing apps, unpredictable spikes, or need reliability
• Technical skill: Comfortable with SSH, basic Linux commands
• Time available: 8 hours initial setup, 2 hours/month maintenance
• Project type: Node.js apps, custom stacks, multiple services, learning experience
• ARM64 compatible: Your stack works with ARM (most modern apps do)

Red flags: You need 99.9% uptime guarantees or instant global scaling without any technical involvement.

Choose Managed Services When:

• Budget: $50+/month or revenue-generating project
• Traffic: Global audience or requiring edge computing
• Technical skill: Any level (that’s the point)
• Time available: Want to focus 100% on product development
• Project type: SaaS products, team projects, client work with SLAs

Red flags: Tight margins, vendor lock-in concerns, or wanting to learn infrastructure.

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The VPS Game-Changer: Self-Hosted PaaS

Here’s where VPS becomes incredibly attractive for consistent traffic: Coolify ↗️ and Dokploy ↗️ give you Vercel/Heroku-like features on your own hardware.

What These Tools Actually Do

Coolify:

• Deploy directly from GitHub with automatic SSL certificates
• One-click databases (PostgreSQL, MySQL, Redis, MongoDB)
• Built-in monitoring and automatic backups to S3-compatible storage
• Docker Swarm support for multi-server setups
• Pull request previews and team collaboration

Dokploy:

• Superior Docker integration with buildpack support
• Native multi-server deployment across different VPS providers
• Advanced Traefik integration for load balancing
• Custom template creation for complex microservices

The Economics That Change Everything

Your app is growing - getting consistent traffic, maybe featured somewhere, users are actually using it daily.

Vercel/Netlify: $200-500/month (bandwidth + function execution adds up fast)

Hetzner CAX31 ($13.49) + Coolify: $14.09/month total

You get:

• 8 vCPUs, 16GB RAM, 160GB NVMe
• 20TB bandwidth (vs Vercel’s expensive overages)
• Full database hosting
• Staging environments
• Team collaboration
• No vendor lock-in

When Self-Hosted PaaS Makes Sense

Choose Coolify/Dokploy + VPS when:

• Your app is getting real traction - consistent daily users, not just weekend traffic
• Budget: Willing to spend $15-50/month for massive savings vs managed services
• Technical comfort: Basic Docker and Linux knowledge
• Team size: 2-10 developers needing collaboration features
• Growth path: Want to scale without bill shock

Sweet spot: CAX31 ($13.49) gives you enterprise-grade resources at startup prices. Add Coolify and you’ve got a $300/month managed service for $14/month.

Reality Check

Your hosting choice isn’t just about cost - it’s about what you want to learn, how much control you need, and where you want to spend your time. Pick based on your current situation, not where you think you should be.