What is cloud hosting? Explanation, advantages and best providers

Cloud hosting is the new standard for modern websites and applications. Instead of using one server, you spread your website across multiple servers in "the cloud". This gives extreme scalability, reliability, and flexibility. Big players like Netflix, Spotify, and Airbnb run on cloud infrastructure - and that technology is now available for smaller websites too.

But what exactly is cloud hosting? And why would you choose it over traditional hosting? Cloud hosting means your website runs on a network of virtual servers that draw resources from an underlying network of physical servers. If one server fails, another takes over. Do you suddenly have more traffic? The cloud automatically scales up.

In this guide, you'll discover everything about cloud hosting: how it works, what the advantages are compared to traditional hosting, which providers offer the best services, and who cloud hosting is suitable for.

How does cloud hosting work?

Cloud hosting uses a cluster of servers instead of a single server. Your website doesn't run on "Server A" or "Server B", but on a virtual network that draws resources from dozens or hundreds of physical servers. These servers are spread across multiple datacenters.

Imagine: your website suddenly has 10x more traffic due to a viral social media post. With traditional hosting, your website crashes or becomes slow. With cloud hosting, extra servers are automatically added to distribute the load. As soon as traffic decreases, you scale back down. You only pay for what you use.

Load balancing distributes traffic across multiple servers. If one server is busy, the load balancer sends new visitors to a less loaded server. This ensures optimal speed and prevents overload. Visitors don't notice this - everything happens automatically.

Redundancy is built in. Your data is stored on multiple servers simultaneously. If one server crashes, your files are still available on other servers. This gives an uptime of often 99.99% or higher. Downtime is rare with well-configured cloud hosting.

You pay "pay-as-you-go" with pure cloud hosting. Using a lot of CPU this hour? Then you pay more. Little traffic at night? Then costs are lower. This is different from traditional hosting where you pay a fixed monthly amount regardless of usage.

Cloud hosting vs traditional hosting

The fundamental difference is flexibility. With traditional hosting (shared, VPS, dedicated) you rent a fixed amount of resources. With cloud hosting, you dynamically scale with your needs. This makes cloud ideal for websites with fluctuating traffic.

Scalability: Cloud clearly wins. Within minutes, you add more CPU, RAM, or storage. With traditional hosting, you must upgrade to a larger package or migrate to another server. Cloud adapts in real-time.

Costs: For small, stable websites, traditional hosting is cheaper. For €5-€10 per month you have shared or VPS. Cloud hosting often starts at €10-€20 per month and can increase if you use many resources. But for fluctuating traffic, with cloud you only pay for actual usage.

Reliability: Cloud hosting has better uptime. With VPS or dedicated servers, a hardware failure means possible downtime. With cloud, another server automatically takes over. For business-critical websites, this redundancy is invaluable.

Complexity: Traditional hosting is simpler. You have one server with a fixed IP address. Cloud hosting is more complex: distributed systems, load balancers, auto-scaling configuration. For beginners, this can be overwhelming.

Performance: For high traffic peak loads, cloud wins. For constant, predictable load, a well-configured dedicated server often performs better (and cheaper). It depends on your specific use case.

Advantages of cloud hosting

Automatic scalability Your website automatically adapts to traffic. Black Friday sale? The cloud scales up to hundreds of servers. Quiet period? You scale back to basic capacity. This happens without your intervention and without downtime. Ideal for webshops and apps with peaks.

High availability and uptime 99.99% uptime is standard with good cloud providers. That's only 52 minutes of downtime per year. This is possible through redundancy: your website runs on multiple servers and multiple datacenters. Hardware failure has no impact on availability.

Pay only for what you use With AWS, Google Cloud, or Azure, you pay per second of CPU time, per GB data transfer, per GB storage. Little traffic? Then your costs are low. Lots of traffic? You pay more, but you also earn more. This flexibility is cost-effective for startups.

Global distribution Cloud providers have datacenters worldwide. You can deploy your application in Amsterdam, New York, Singapore, and Sydney simultaneously. Visitors get content from the nearest datacenter, which drastically improves load times globally.

Built-in redundancy and backups Your data is automatically replicated across multiple servers and locations. Hard drive crashes? Your data is safe on other servers. Many cloud providers also offer automatic snapshots and point-in-time recovery. Data loss is virtually impossible.

Fast deployment and development Need a new server? Within 60 seconds, a new instance is running. Want to test with different configurations? Spin up multiple servers, test, and delete them. This greatly accelerates development and experimentation.

Advanced features Cloud providers offer more than just hosting: managed databases, AI/ML services, analytics, CDN, containerization (Docker/Kubernetes), serverless functions. You can build complete infrastructures without managing your own servers.

Disadvantages of cloud hosting

Costs can be unpredictable With pay-as-you-go pricing, costs can explode if you're not careful. A misconfigured application can accidentally consume huge amounts of data. Without budget alerts, you can be surprised by bills of hundreds of euros.

Complexity requires expertise AWS has hundreds of services and thousands of configuration options. For beginners, this is overwhelming. You need knowledge of networking, security groups, IAM policies, load balancing. Misconfiguring can lead to security risks or high costs.

Vendor lock-in risk If you integrate deeply with AWS-specific services (Lambda, RDS, etc.), migrating to Google Cloud or Azure is complex and expensive. You depend on the provider. Price increases or service changes can affect you.

Not always cheaper For small websites with stable traffic, traditional hosting is often cheaper. A VPS for €10/month can cost €30-€50 in equivalent cloud resources. Cloud is especially cost-effective with fluctuating traffic or when you need scalability.

Possibly worse support With large cloud providers (AWS, GCP), support is often slow or expensive (AWS support from $29-$15,000/month). With traditional hosting providers, you often get personal support. For companies without their own DevOps team, this can be a disadvantage.

Who is cloud hosting suitable for?

SaaS applications and web apps If you're building a SaaS platform that needs to scale from 10 to 10,000 users, cloud hosting is essential. The flexibility to add resources without downtime is crucial. Examples: project management tools, CRM systems, online collaboration platforms.

E-commerce with seasonal traffic Webshops with extreme peaks (Black Friday, Christmas) benefit enormously from cloud. You don't pay all year for capacity you only need one month. The cloud automatically scales with your busiest periods.

Content and media platforms Websites with lots of media (video, images) use cloud storage and CDN. Netflix and Spotify run entirely on AWS. For smaller video platforms, cloud offers affordable storage and streaming capacity that traditional hosting can't match.

Startups with growth ambitions If you don't know whether your website will have 100 or 10,000 visitors next month, cloud is ideal. You start small and scale up. No expensive upfront investments, no capacity surplus. Perfect for fast-growing startups.

International websites Do you have visitors worldwide? Deploy your website in multiple regions. European visitors get content from Amsterdam, Americans from New York, Asians from Singapore. This dramatically improves load times and user experience.

Development and testing teams For developers who often need test servers, cloud is perfect. Spin up a server for testing, use it for two hours, delete it. You only pay for those two hours. Much cheaper than permanent test servers.

Companies with compliance requirements Cloud providers offer datacenters in specific regions and compliance certifications (ISO, SOC2, GDPR). For companies that must keep data in the Netherlands, AWS, Azure, and Google Cloud offer Dutch datacenters.

Comparing cloud hosting providers

AWS (Amazon Web Services) The market leader with the largest range of services. From €0.01 per hour for small instances, up to hundreds per month for large workloads. Very flexible but also most complex. For serious applications with growth ambitions. Check current prices on our comparison overview.

Google Cloud Platform Strong focus on data analytics and AI/ML. Good pricing for sustained use (discount for long-term use). From €5-€10 per month for small instances. Slightly more user-friendly than AWS. Great choice for data-intensive applications.

Microsoft Azure Best integration with Microsoft products (Windows Server, .NET, SQL Server). From €10 per month for basic instances. Widely used by enterprise companies. Good hybrid solutions (on-premise + cloud).

DigitalOcean Much simpler than AWS/GCP/Azure. Fixed prices from €6 per month for Droplets (cloud VPS). Excellent documentation and community. Perfect for developers and smaller projects. Fewer services than big providers but much more straightforward.

Cloudways Managed cloud hosting platform on top of AWS, GCP, or DigitalOcean. From €11 per month. They manage the cloud infrastructure for you - ideal if you want cloud without complexity. Including support and optimization.

TransIP Cloud VPS Dutch cloud VPS from €7 per month. Fewer features than AWS but much simpler. Dutch support and datacenters. Good middle ground between traditional VPS and pure cloud.

Practical tips for cloud hosting

Start small and scale gradually Don't start with the biggest instance. Start small and monitor your resource usage. Scalability is the advantage of cloud - use it. Many companies overpay by choosing too large instances "to be safe".

Set budget alerts With AWS, GCP, and Azure, you can configure budget alerts. Get a warning when your costs reach €50, €100, or €200. This prevents surprises. Don't forget this - cost explosions are real.

Use managed services where possible Managed databases, managed Kubernetes, managed Redis - pay a bit more but save enormous amounts of time. Security, updates, and backups are done for you. For small teams, this is essential.

Implement auto-scaling policies Configure when you want to scale up (at >70% CPU) and scale down (at <30% CPU). This optimizes costs without sacrificing performance. Without auto-scaling, you pay too much or have too little capacity.

Choose the right instance types General purpose, compute optimized, memory optimized, storage optimized - each type is optimized for specific workloads. A wrong choice costs money or performance. Read documentation or ask for advice.

Use CDN for static content Serving images, CSS, JavaScript via CloudFront (AWS) or Cloud CDN (GCP) saves bandwidth and speeds up your site. This can halve your costs for content-heavy websites.

Reserve capacity for constant workloads With AWS/GCP/Azure, you can buy reserved instances for 1-3 years at a big discount (up to 70%). For workloads you always need, this is much cheaper than on-demand pricing.

Monitor everything CloudWatch (AWS), Stackdriver (GCP), or Azure Monitor give insight into your resource usage. Without monitoring, you don't know where your money goes or where bottlenecks are. Monitoring is essential with cloud.

Backup and disaster recovery plans Automate backups and test recovery procedures. Cloud providers offer tools but you must configure them yourself. Test regularly whether your backups actually work.

Secure your cloud environment Security groups, IAM policies, encryption at rest and in transit - cloud security is complex but crucial. Misconfigured S3 buckets have led to major data breaches. Invest in security from day 1.

Want to compare cloud hosting with VPS? Read our VPS hosting explanation for the differences. Or check all hosting providers for a complete overview of traditional and cloud hosting options.

Frequently Asked Questions

How much does web hosting cost on average?

Web hosting costs between €3 and €15 per month for shared hosting on average. VPS hosting starts around €10-€20 per month, and dedicated servers from €50 per month.

Can I upgrade to a different package later?

Yes, with most hosting providers you can easily upgrade to a larger package when your website grows. This can usually be done without downtime.

Is Dutch hosting better than foreign hosting?

For Dutch visitors, Dutch hosting is often faster due to the shorter distance. Additionally, communication with support is easier and you comply with GDPR legislation.