Hosted vs. Cloud Services: What Are The Differences?

By the year 2025, the world will store more than 200 zettabytes of data. With this data growth, there are more opportunities for cybercrime and innovation.

If your business is in need of an IT service that’s innovative and can help prevent cybercrime, you might be considering hosted services or cloud services, but what’s the difference?

Keep reading to learn about hosted vs. cloud services.

What Are Cloud Services?

To understand hosted vs. cloud services, you need to know the definition of each. Let’s start with cloud services.

Cloud services are third-party computing services hosted online by providers and delivered to customers through the internet and on demand.

There are three categories of cloud services:

  1. Software as a Service (SaaS)
  2. Platform as a Service (Paas)
  3. Infrastructure as a Service (IaaS)

SaaS is a single application built for a certain purpose. For example, accounting, file sharing, or customer relationship management (CRM).

PaaS is a cloud-based solution combining a collection of applications into one platform. A communications platform might combine chat, SMS, video calls, and other real-time communication applications.

IaaS is a cloud-based solution providing a development framework that businesses can use to support and build custom apps and networks.


To better understand hosted services and cloud services, you need to know about multitenancy. The main difference between hosted and cloud services is tenancy.

Cloud-based solutions need multitenancy to share resources and costs across multiple users or businesses. All tenants use the same:

  • Software
  • Platform
  • Infrastructure

All of these are hosted by the same public cloud, but your business’s data is inaccessible to anyone outside of the company through isolation.

What Are Hosted Solutions?

Hosted services, like cloud-based solutions, are managed by a third-party provider and accessed through the internet. Hosted solutions also include PaaS, IaaS, and SaaS.

Instead of a public cloud, hosted services require physical servers owned by a provider who maintains them somewhere privately off the premises.

Hosted services are completely virtualized so that businesses can use them online without the need for software or hardware installations.

Companies typically access their solutions through a remote desktop or private network.

There is also such thing as hosted cloud services that allow companies to benefit from both solutions. Learn more about hosted cloud solutions if you think it interests your business.

Single Tenancy

You know that cloud services use multitenancy. Hosted services utilize single tenancy.

Single tenancy is a single platform or application that has a single supporting database and infrastructure. A single customer will use it.

In contrast to multitenancy, resources aren’t shared. This means that resources can be more expensive than true cloud services and are limited in scope.

Cloud Services Benefits

Using cloud-based services comes with a lot of benefits for businesses. Many of the advantages you won’t find with hosted solutions.

Here are the main benefits you can look forward to:

Simplify IT

Cloud providers build and maintain necessary hardware so that your company doesn’t have to. You won’t need an IT department to install or manage servers. This also means that providers can update the software on every computer.

Whenever you have a security issue, providers will be there to troubleshoot the problem in a flash.

Reduce Costs

Cloud services allow you to pay only for what you use. You won’t need to invest in software licenses or hardware that your business will never get around to using.

Implementing a SaaS solution alone can save a company a good amount of money over the years.

Integrate Business Systems and Data

To streamline workflows and team productivity and collaboration, you can integrate different cloud solutions.

We’ve briefly discussed a CRM and a cloud communication platform. You can integrate these together to benefit the business. For instance, this can allow employees to see customer information before answering incoming calls.

Increase Agility and Scale Faster

In just a few clicks, you can make changes with cloud services. It allows you to add new features, change the number of users, or shift workflows with ease because of the functionality of the service.

Leverage Predictive Analytics

With all of your company’s data in the cloud, you can easily apply the data to advanced technologies. This can improve efficiency and help your business gain new insights.

More importantly, you can use predictive analytics to future-proof your business.

Support Remote Workforces

Cloud services make it easier to access company information from anywhere at any time. As long as a device has an internet connection, employees can work. This is a major benefit for remote workforces.

Hosted Services Benefits

Hosted services have some of the same benefits as cloud solutions, such as remote access and the ability to integrate with different cloud solutions. Hence, hosted cloud services.

Because hosted services software and hardware are maintained by a provider, there’s less for an IT department to manage. Traditional computing solutions require a lot more work.

Depending on your provider and the setup agreement you have, hosted services might be more customizable than cloud services. You’ll have more control over security protocols, which is essential in highly regulated industries.

Most leading cloud providers will also have security infrastructure that complies with specific industry standards and regulations.

Hosted vs. Cloud Services: Which Is Best?

When it comes to hosted vs. cloud services, deciding which is the best is subjective. One business might benefit from hosted services while another swears by cloud services.

By learning the differences outlined in this guide, it’s easier to decide which is right for your company.

Just know that the main difference between the two is multitenancy vs. single tenancy. Learning this can help you come to a decision.

For more informative business technology articles like this, check out the other posts on our website.


Abdul razzaq is a business entrepreneur, freelancer and digital marketer. He believes in spreading mass awareness about changing digital marketing and new trends in e-commerce

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