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Virtual Servers vs. Physical Servers: Which Is Best For Your Business?

Virtual Servers vs. Physical Servers: Which Is Best For Your Business?

Organizations need secure, reliable, and high-performance processing and storage solutions for their applications and data. A recent survey of Chief Information Officer (CIO) priorities indicated the following topics are key areas of focus for many IT programs:

IT management must now reconsider virtual vs. physical servers to find cost-effective data solutions that meet risk mitigation, data treatment, and regulatory compliance needs in a post-pandemic world.

Stated plainly: it isn’t a simple choice for many organizations due to complex business requirements and the pros and cons of each option.

In this blog post, you’ll learn the benefits and risks of physical servers, data centers, and virtual environments. We’ll also discuss the 11 factors to help you choose what’s best for your business.

Virtual Servers vs. Physical Servers

​Because the coronavirus pandemic closed many office buildings, special attention has focused on the utility of using a data center and virtual servers as opposed to hosting physical hardware in the office.

With the new remote-workforce world, companies are reconsidering their past decisions on physical servers versus virtual. On the other hand, moving servers to the cloud, either in colocation environments or virtual servers, has become a smart decision for most companies.

Despite living in a technology-driven world, physical servers still have their use cases. To make the right decision, let's weigh the pros and cons.

The Pros and Cons of Physical Servers

Physical servers are powerful computers generally owned, managed, and maintained by your company’s staff.

Pros of Physical Servers:

  • Your IT team has full access to your dedicated server resources 24/7/365, which can be advantageous for high-demand or business-critical operations.
  • The server may be located onsite or in a conveniently-located colocation facility, depending on your needs.
  • Your IT staff can fully customize and configure the server to your specifications and business requirements.

Cons of Physical Servers:

  • Relatively high cost of server purchase, maintenance, and in the case of hardware failure, replacement.
  • Your IT staff will be responsible for setup, configuration, and maintenance.
  • You may need to hire a contractor or vendor for help if you have difficulty with configuration or repairs.
  • You cannot scale storage in small increments once you reach the maximum workload since you purchased and own the hardware.
  • Requires physical or colocation space.

The Pros and Cons of Virtual Servers

A virtual server is a virtual machine that mimics a physical server’s functionality. Virtualization typically occurs in the cloud or on servers that are owned, maintained, and located offsite. Hiring a hosting vendor who offers secure cloud services is the most common way organizations switch to virtualization.

Pros of Virtual Servers:

  • Fewer upfront costs since you are not required to purchase hardware.
  • Potential for lower lifetime costs on configuration and maintenance.
  • Access to expert assistance on setup, configuration, maintenance, and software licenses.
  • Reduced need for in-house IT talent.
  • Potential to consolidate servers and increase workload efficiency.
  • Reduced environmental footprint due to shared workloads.

Cons of Virtual Servers:

  • Potential for higher recurring monthly costs, as opposed to higher upfront investment.
  • Possible issues with application compatibility, which are best discussed with a knowledgeable vendor.
  • Not all vendors are amenable to scaling your agreement up or down in small increments, which largely depends on vendor policies and service level agreements (SLAs).
  • You are no longer independently controlling of your physical server and the applications running on them.

Physical Servers

Virtual Servers

Significant upfront costs

Fewer upfront costs

Requires physical or colocation space

Does not require physical space

Maintained by your in-house IT team

Reduces need for in-house IT talent

Cannot scale storage without purchasing new hardware

Can consolidate servers for increased efficiency

Ongoing maintenance but no recurring costs

Recurring monthly costs

Fully customizable solution

Less independent control over solution


Are Virtual Servers or Physical Servers Right for My Business?

As the world quickly moves faster toward cloud-lifting all applications and data into the cloud, larger enterprises are leading the way. Enterprises are virtualizing at twice the rate of small businesses.

In the wake of the worldwide pandemic, remote work and telecommuting have skyrocketed the number of businesses using storage virtualization and application virtualization.

Here are some of the factors that should be considered before making the final decision:

1. Budget

A primary benefit of virtualization is cost savings. Case studies indicate that companies can save tens or hundreds of thousands of dollars annually by going virtual. While you will pay virtualization costs every month, you can save on:

  • Hardware
  • Deployment
  • Utilities
  • Facilities
  • Human labor/talent

Virtualization also offers businesses the ability to scale up and down in relatively small increments. With virtualization, you are released from the cost of needing to commission or decommission servers.

In terms of using a colocation server, power consumption continues to get more efficient with newer servers. This enables customers to save money as power is typically the highest cost in a colocation environment.

2. Performance

Regardless of your choice, fully understanding your business requirements is critical. The right virtualization vendor can guide you through the process of understanding which data, applications, and processes are most critical to your company’s operations and health.

Certain applications may require more dedicated server resources due to a diminished tolerance for risk in performance. In other cases, when it comes to rarely used assets, you may be fine to sacrifice performance and speed for cost savings.

Regardless of which route you go, understanding your performance needs is crucial to having the best experience with a dedicated equipment or a virtualization vendor.

Direct connections to cloud services have made utilizing cloud services such as AWS and Azure easier. Getting GigE and 10 GigE circuits using Atlantech Online Cloud Connect or similar services makes it more functional than relying on connections over the public Internet.

3. Business Continuity

Since virtualization servers are located offsite, you have an immediate advantage in disaster recovery. In many cases, vendors with appropriate risk-mitigation planning can significantly improve your business continuity planning. Consider your company’s ability to tolerate asset loss or periods of data unavailability when making a decision.

4. Risk Mitigation

Risk mitigation ultimately depends on the configuration of your dedicated or virtual servers. Failure can be devastating if your entire company's workload is balanced on a single piece of equipment located in-house or in a vendor's virtual environment.

In many cases, companies can significantly mitigate risk by switching to virtualization vendors that offer appropriate safeguards against hardware failure and backups both on and offsite.

5. Information Security

The security of your physical or virtual servers depends largely on configuration, staff knowledge, and environment. Like risk mitigation, these factors can vary significantly depending on a business’s unique requirements and internal resources. For many organizations with minimal budget or hardware, switching to virtualization can offer significant gains in security protection.

6. Space and Environmental Control

Many organizations' data assets are increasing rapidly, presenting space-related challenges for IT teams. If you are running out of room to store and maintain temperature control over your servers appropriately, it's likely time to consider the colocation of physical servers or virtualization. Maintaining appropriate temperature and humidity can become more challenging as your data assets increase.

7. Staff Knowledge

Does your staff have the knowledge and capacity to appropriately manage server acquisition, maintenance, configuration, and security? Perhaps more importantly, are they aware of best practices for increasing efficiency and realizing cost savings? Switching to virtualization can free your IT team from dealing with data storage and server management, allowing them to focus on other priorities and opportunities for cost savings.

8. Projected Growth in Workload

When you’re virtual, adding more storage or processing power can be as simple as a conversation with your vendor. In most cases, it’s significantly easier to scale your servers up or down with virtualization since you’re not responsible for physical server acquisition, setup, configuration, and testing. 

If your business’s data assets or application needs are growing rapidly, you could significantly save time and resources by switching to virtualization immediately.

9. Migration Plans

Many organizations choose to migrate their workloads to virtualization slowly over time. If this is your intent, communicate with your vendor about their existing migration tools and discuss application compatibility.

Don’t let fear of complex migration stand in the way of your decision to go primarily virtual. Most businesses find that migration to virtualization is much easier than they think, even when performed slowly over time.

10. Data Type

Certain workloads aren’t mission-critical and may not need to be deployed virtually. You may have certain data assets that do not contain payment, health, or other types of information that are subject to regulatory requirements. In these cases, using a basic physical server that you already own could be the right choice.

In a case study at Westminster College, the IT team decided to use physical servers to store camera footage while moving most of their overall workload to virtualization. They decided this because while camera footage is important, it's not mission-critical. The Westminster team felt they could absorb the responsibility and risk of storing this data on-premises using a current basic server.

11. Compliance Needs

It's important to carefully assess your ability to keep compliance in-house if you must adhere to HIPAA, PCI, Sarbanes-Oxley, or other regulatory requirements. Both physical and virtual servers must meet all standards set forth by law. Typically, compliance is verified and measured by independent auditors.

If you are considering virtualization, ask for a copy of a potential vendor’s most recent report on compliance (ROC) from an audit.

Tips for Migrating Between Physical and Virtual Servers

To ensure a smooth transition and maximize server environment benefits, creating a strategic migration plan is essential. Let's quickly look at best practices and some potential challenges that can arise in a transition between physical and virtual servers.

5 Best Practices for Migration

1. Assess Current Infrastructure

Assess your current infrastructure, including hardware, software, and data dependencies, to identify challenges and plan accordingly before migrating.

2. Set Clear Objectives

Set clear goals for the migration, like performance improvement, scalability, or cost reduction. A clear vision will guide decision-making throughout the migration journey.

3. Develop a Detailed Plan

Develop a detailed migration plan outlining tasks, timelines, roles, data transfer methods, application adaptability, downtime limits, and contingency measures for unforeseen issues.

4. Test in a Controlled Environment

Test production workloads in a controlled environment before migrating to prevent issues and disruptions.

5. Train Personnel

Train IT personnel for a smooth migration and to handle any challenges that arise. Speaking of potential challenges...

4 Common Migration Challenges to Plan Around

1. Application Compatibility

Conduct thorough testing to address compatibility issues between physical and virtual server environments before migrating critical applications.

2. Data Migration Complexity

Efficiently transfer data from physical to virtual servers by prioritizing critical data and using efficient methods to minimize migration downtime.

3. Downtime and Disruption

Plan migration activities during off-peak hours to minimize disruption and communicate downtime schedules in advance.

4. Resource Allocation

Allocate sufficient resources for the migration process to avoid delays and complications.


Virtual vs. Physical: Which is Best For You?

Depending on your use case, the right answer may be using virtual and physical servers in a colocation data center.

Virtual server hosting has matured, and we see more hybrid approaches where web-facing servers may be virtual and back end, data crunching servers reside in a colo data center, resulting in a hybrid environment.

For more information about choosing the right data center for your business, check out our free resources, 10 Questions To Ask Before You buy Data Center Services For Your Business. You can also explore Atlantech’s data center page to see if our solution is right for your business.


Tom Collins
Post by Tom Collins
May 16, 2024
Tom is the Director of Enterprise Sales & Marketing for Atlantech Online. He has over 20 years of professional experience in the Internet Service Provider industry and is known for translating technology into positive results for business. A native of Washington, DC, a graduate from University of Maryland (degrees in Government & Politics and Secondary Education), Tom is also a five-time Ironman finisher.