Virtual Server, Cloud Server or Physical Server?

Understanding the difference between a virtual server, cloud server, and physical server is crucial when deciding how to host your business systems.

Virtual servers are a software-defined server that runs on a physical machine—often alongside other virtual servers. These are created using a hypervisor and can operate completely independently, with their own operating systems and applications. This setup is common in both on-premise and cloud environments, allowing for efficient use of hardware resources.

Cloud servers are essentially a virtual server, but it’s hosted in a cloud platform such as Microsoft Azure, AWS, or a private data centre. The key distinction is that cloud servers are delivered as a service, offering scalability, remote access, redundancy, and managed infrastructure—all billed monthly or per usage. In short: all cloud servers are virtual servers, but not all virtual servers are cloud-based.

On the other hand, Physical servers —sometimes called dedicated servers—runs directly on its own hardware, with a single operating system having exclusive access to all resources. This setup can offer high performance for specific workloads but often leads to underutilisation, higher costs, and less flexibility.