How do you know when to upgrade hosting to VPS or Dedicated Server from an SEO perspective?
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Ryan has given a great answer. I have left hosting services because of speed issues. They had way to many sites on the server.
Then I found a really good host and never had a speed issue running lots of sites on several of their servers. My movement through their various plan levels and on to dedicated hosting was mainly the need for bandwidth. Speed was not an issue when I moved to dedicated but that gave me the ability to select processors and add memory which got my site really fast.
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I concur with the following advice given.
Nothing short of the cloud beats having 100/mbs download speeds.
On a side note, VPS cloud nodes have become the new rage. While cheaper than a dedicated server, here has been but one experience:
I went from a 8.4ghz 5.14gb cloud setup (14 nodes at VPS.net) to a local (to Seattle) dedicated quad proc with only 6gb ram. The second server is well over 40% faster than the VPS cloud.
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All great responses
Here is a neat tool to see who is sharing space on your present server (it will also indicate potential 'bad' sites in red) http://www.yougetsignal.com/tools/web-sites-on-web-server/Andy

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I did look it up and though I have a "Dedicated IP Address", I saw another domain hosted on the server with that same IP Address. It's not a bad site in red, but I thought a dedicated IP address was for one website only.
I also checked it at http://www.domaintools.com and we show up as the only one.
And our host did check it out, too.
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You are right zharriet, time to give your host a call

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OMFG I did not know this tool existed!!!! i have been hosting on shared accounts for years, and always wondered, but never knew. now i do. WOW!
I wish i could give you 2 thumbs up.
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Would you share your really good host's name? Ours got back with a quote and I think it is high, but his expertise is probably worth the extra.
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For all of the issues you mention, I am leaning towards the dedicated server. I think the level of business that we do on the web justifies the expense, even if it may be "overkill" on our actual needs. But with Google looking at speed (which is in their best interest...), it could only help.
Customization and not having to share problems other websites may be having on the server are also in the mix.
Thanks!
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Thank you. I have something to compare now and more choices.
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Before adding new expenses purely for a speed boost, I would suggest looking at your site with PageSpeed. It is a free add-on in FireFox and is also available for Chrome. The results will let you know what opportunities you have to improve your page load optimization. Some changes offer a noticeable and immediate difference.
Don't try to get a perfect score. Generally speaking, anything 90+ is fine.
If you are purely looking at speed, VPS + Cloud would probably be the ideal solution. I would specifically use Amazon's cloud service to start, as they charge you on your exact usage with no minimum. If you ever get up to $100/month in usage, you can then began to examine other services to compare pricing.
If you use a cloud, I recommend not only offering your images and video files, but all your CSS and Javascript files. Your users will notice the speed difference.
I also want to be clear you may be able to keep your existing shared server and make other adjustments, or change hosts, and be absolutely fine. A shared server often costs less then $100/yr, where a dedicated server or VPS + Cloud will probably be $150+ per month. It's a big difference.