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Very often businesses opt for cloud computing solutions without fully realizing its implications. They feel that the costs of cloud hosting will be far lower compared to that of dedicated servers. But in the long run, this assumption turns out to be false and they find themselves paying more than what they would have had they adopted dedicated hosting in the first place. This is not to suggest by any means that cloud hosting is not cost-effective. Cloud hosting will be cost-effective when you know what you are getting out of it. For companies which do not have the funds or expertise to afford dedicated hosting, cloud solutions are very beneficial.

Moreover, when you are launching a new venture for which you do not have enough capital to buy dedicated servers, you can always count on cloud hosting. But, when traffic to the site keeps increasing, there are increased demands for bandwidth and processing power. The costs suddenly start to escalate and within a short time, you realize that you are actually paying almost the same amount as you would have for dedicated servers.

What needs to be understood is that there is a big difference between calculating traditional hosting and cloud hosting costs. When you have a traditional set-up, the provider will offer specific products. Each of these, whether it is power or memory or bandwidth or storage space, will have its pre-defined capacity. So, businesses will pay monthly fees to avail of such resources from the host. So, in other words, the business already knows how much of Ram or CPU or bandwidth it will get for that price. Sometimes, the amount they get may be more than what they really need. Much of the resources get wasted. And, the costs on paper appear to be very high.

This is when cloud hosting plans begin to appeal to customers. Businesses prefer cloud hosting as they will only have to pay for the resources they will use and nothing extra. As the owner of a business venture, you can comfortably keep a check on your expenses when your demands are low. But, when the earlier traffic experiences a sudden increase, the cost escalates too. What is worse is that this cost keeps growing month after month. You find it hard to keep a control over your budget in such a situation.

This analysis proves that although cloud hosting offers many cost-saving benefits to its clients, it is not for everyone. There are no hidden charges, however. You have the best opportunity to roll out a pilot application at a very affordable price. The best part about cloud hosting is that you can even scale up your resources as and when you need them. Arranging for migration to a new hosting provider or package is not an easy task. Being able to scale your resources in real time is a huge advantage for any business. At the same time, you need to realize what you will be paying for. This scalability will always come for a price which must be evaluated vis-à-vis your budget. Earlier, businesses would launch pilot applications using any low-cost option that was available to them. They would then change their hosting plans depending on the growth of their client base. Cloud hosting has definitely made this process simpler.

So, before you actually sign up for cloud hosting, it may be a good idea to explore multiple hosting options to find out how the expenses may go up if the capacity demands change. When you are testing new applications, you need to, therefore, run various tests to check for traffic. You can create a graph to display how the memory, storage space, processing power and network traffic is changing over time. You will be able to get an idea of how much capacity your business will need to match the traffic levels to ensure complete client satisfaction. Then you can compare this information with the prices of different hosting plans and calculate the approximate costs. This will allow you to make the right decision on whether to opt got web hosting or cloud hosting.

When analyzing why come companies may feel the pinch even after choosing cloud hosting plans, you must understand the benefits hosting plans offer and functions the businesses must handle on their own. One cost which is likely to creep up is the management cost. This refers to how much effort and time you will have to devote to run the application launched. So, when you have exhausted your capacity, you will either have to choose a new hosting option or add resources to keep going. To take this decision, you have to consider the prices of cloud hosting models.

When you have evaluated the benefits vis-à-vis the costs, you can successfully make a plan which will cater to your budget, time and labor which you can spare for running an application. In almost all situations, you will find cloud hosting to be most viable. Alternately, you can begin with the cloud and then move onto specific server capacity after you have got a market for your product. So, the bottom-line is that companies will choose cloud hosting depending on what their goals are.