The Difference Between Cloud Services & Hosted Services

It seems as if everyone has their own definition of cloud services and hosted services. In truth, hosted and cloud services are very similar — both are off-premises and are accessed through an Internet connection. While some believe that these services are essentially the same, experts argue that cloud services are more interrelated with other web-based offerings. When it comes down to it, the main difference between hosted and cloud services is multi-tenancy.

What Is Multi-tenancy?

According to Gartner, "Multitenancy refers to the mode of operation of software where multiple independent instances of one or multiple applications operate in a shared environment. The instances (tenants) are logically isolated but physically integrated. The degree of logical isolation must be complete, but the degree of physical integration will vary. The more physical integration, the harder it is to preserve the logical isolation. The tenants (application instances) can be representations of organizations that obtained access to the multitenant application (this is the scenario of ISV offering services of an application to multiple customer organizations)."

In other words, multi-tenancy implements the sharing of resources and costs among a large pool of users and allows infrastructure to be concentrated in locations with lower costs, maximizing peak-load capacity and improving utilization and efficiency in systems that are often only used up to 10 to 20% of the time. Hosted services generally do not offer the same cost efficiencies, elasticity, or reliability as cloud services. 

The cloud provider benefits of multi-tenancy are amplified by only having to support a single version of software, the uniformity of its hardware environment, and its efficiency. The general rule is that if a solution is not multi-tenant, then it isn't a cloud solution, and won't have the same benefits.

What Are Hosted Services?

Hosted services are technology services offered by a provider hosting physical servers that are removed from the customer’s premise. A hosted service provider owns and oversees infrastructure, software, and administrative tasks at a private location. The hosted service system is available to clients, typically through a direct network connection that uses the Internet (VPN, Remote Desktop, etc.). There are three main elements of hosted services: 

◉ Software as a Service (SaaS)

◉ Platform as a Service (PaaS)

◉ Infrastructure as a Service (IaaS)

These three combined encompass software, network capacity, and the equipment used to support operations such as storage, hardware, servers, and networking components.

What Are The Benefits of Hosted Services?

Hosted services are generally very secure and provide a wide range of services, data warehousing, off-site backup, and more. When thinking about hosted services in the real-world, you actually come across them most days. Some examples of common hosted services include:

◉ Virtual server hosting

◉ Security

◉ File hosting

◉ Website hosting

◉ Email

What Are Cloud Services?

Cloud services are a subset of hosted services. Hosted services, even those accessible using the Internet, cannot be referred to as real cloud solutions unless they have been built to capitalize on the collaboration and interconnectivity that is a fundamental part of the cloud. Cloud applications are web-enabled, meaning, instead of being based on physical hardware, they are based in a shared virtual environment managed by a cloud-hosting provider. Only server installation and a device with an Internet connection are needed for cloud services. Many line-of-business (LOB) applications are adding cloud services to their offering. Cloud servers can be constructed to provide varying levels of performance, security, and control to configure to your business’s needs.

What Are the Benefits of Cloud Services?

Cloud servers allow your business to optimize IT performance without the overwhelming costs associated with the purchase and management of fully dedicated infrastructure. These cloud servers are the ideal fit for businesses of variable demands and workloads. The most significant benefit of cloud services compared to hosted services is the scalability of solutions while remaining relatively affordable for most businesses. When selecting cloud services, the expenses related to the equipment and maintenance of the data center or colocation facility are spread across everyone within the facility.

Cloud services offer on-demand utilities, multi-tenancy features with seamless uninterrupted scaling, and features that are sure to meet your business’ needs to adapt and help you meet the demands of your client base.

Cloud Services vs. Hosted Services

When it comes down to cloud services vs. hosted services, there is no right or wrong answer when selecting one. It’s up to the organization to evaluate their needs and wants to select the best service. Today’s cloud services and hosted services have something to offer to everyone, so take your time to ensure you select the right service for your company.