Physical vs. virtual servers: differences, benefits & more

| By:
Amit Mehta

Evaluating the benefits and differences between physical vs. virtual servers is critical for MSP client success. Building a secure and efficient infrastructure for your clients should center on either a physical or virtual server. 

Each offers a distinct approach to hosting and running applications in an IT infrastructure. Physical servers function as tangible, standalone hardware units that directly run an operating system and host applications. On the other hand, virtual servers are software-based instances of servers running on a physical host machine.

Read on to learn about the benefits and disadvantages of using a virtual vs. physical server—or a combination of the two—for an optimal structure for your clients. 

What is a physical server?

A standalone hardware unit, each physical server is a complete machine with its own CPU, RAM, storage, and network interfaces. You’d typically choose a physical server for: 

  • Performance: Physical servers offer higher performance and computing power, making them an optimal choice for organizations that run resource-intensive applications. 
  • Isolation: Because they are standalone, physical servers are isolated and reduce the risk of interference from other applications. 
  • Predictability: With resource allocation dedicated to specific applications, physical servers can be more consistent and predictable.    

A physical server is ideal for clients seeking increased storage capabilities and performance from their operating systems. If your client requires resource-intensive applications, such as high-performance databases or scientific simulations, physical servers are ideal. You might also use physical servers to minimize potential risks if a client uses security-sensitive applications. 

What is a virtual server?

A virtual server is a software-based server acting as an emulation of an actual physical computer. Whereas a physical server has hardware for its operating system, a virtual server is a complex system that allows multiple virtual machines (VMs) to run simultaneously, virtualizing computing resources and sharing them among all VMs. 

A virtual server is typically best for: 

  • Efficiency: Virtualization allows for more efficient usage of hardware resources. 
  • Scalability: You can seamlessly scale virtual servers up or down, providing more flexibility for clients to adjust as their demands change. 
  • Cost-effectiveness: Opting for virtualization reduces overall hardware costs and power consumption, and can cost roughly $5,000 less to deploy than physical servers. 

A virtual server is ideal for clients seeking to increase productivity without increasing their footprint. Virtual servers are typically recommended for web hosting, web applications, and development and testing environments. 

Physical vs. virtual servers: comparing benefits and drawbacks

When weighing whether a physical vs. virtual server is optimal for your client, consider the key benefits and drawbacks of each. 

Physical servers: key benefits

  • Performance: Thanks to their dedicated hardware resources, physical servers can often perform better than virtual servers. The lack of competition or interference from other servers can optimize your clients’ application performance. 
  • Maintenance: Physical servers require regular maintenance to mitigate potential security risks. Because maintenance applies to just a single entity, this simplifies troubleshooting. 
  • Reliability: Because resource availability and allocation are predictable on physical servers, this results in greater reliability and consistency. This is the best choice for clients running applications requiring consistently stable performance. 
  • Control: Because they’re physical entities, physical servers give you and your client complete control. This allows you to tailor specific configurations or adjustments to your clients’ needs.  

Physical servers: potential drawbacks

  • Implementation: Because you must physically install physical servers, there is a higher need for specialized support. In addition, migration between two servers can be challenging and time-consuming. 
  • Cost: Physical servers are typically more expensive to purchase, set up, operate, and maintain over the long term. They require more physical space, consume more power, and may require cooling costs. 
  • Scalability: While it’s seamless to scale with a virtual server, scaling an operation with a physical server requires purchasing and setting up additional hardware—a costly and time-consuming process. 

Virtual servers: key benefits

  • Implementation: Virtual servers are easy to deploy and run instantly, whereas a physical server requires a more intensive setup process.
  • Cost: The initial purchase of virtual servers and software can be expensive—but upgrading is less expensive, so this is typically a more cost-effective solution for the long term. 
  • Scalability: You can seamlessly scale virtual servers up or down, making them highly adaptable and ideal for clients with changing workloads or in the midst of a growth period. 
  • Recovery: Virtual machines offer regular “snapshots” and backups, simplifying disaster recovery and overall system restoration in the case of an emergency.  

Virtual servers: potential drawbacks

  • Performance: Shared resources can reduce efficiency and stability for clients’ needs, leading to slight performance degradation. 
  • Cybersecurity: Although virtualization technologies have evolved greatly and virtual servers are highly secure, potential risks remain. Consequently, clients should consider their cybersecurity requirements. 

The choice between physical vs. virtual servers ultimately depends on your client’s specific use case, budget, scalability needs, and performance requirements. 

Generally, a physical server is the best choice if a client has a demanding workload and requires processing and volume optimization. However, if your client is a startup or small business, choosing a virtual server is best due to the low cost, easy implementation, and long-term flexibility. 

While some organizations choose between a virtual vs. physical server, others may adopt a hybrid approach. This allows organizations to leverage the benefits of both options while still optimizing overall performance, cost, and resource utilization effectively. 

Physical vs. virtual servers: backup and security needs

Now with a greater understanding of the key benefits and potential drawbacks of physical vs. virtual servers, consider their security and backup capabilities. 

Physical servers

Due to their structure, physical servers have configured security for each server. However, it can be more complicated when considering computing capabilities, resources, and the sensitivity of stored data. 

If a disaster strikes a physical server, it’s essential to restore critical data and operations swiftly to minimize business downtime and avoid irreversible damage. It can take several hours or days to restore a physical server. Therefore, creating a disaster recovery plan ahead of time is necessary to prepare for potential threats. 

Virtual servers

In general, virtual offers more centralized security and management due to new technologies at the hypervisor layer—a universal security model can be developed and implemented easily.

The disaster recovery process in a virtual environment is much simpler. When a disaster strikes a virtual server, there is almost no downtime, as you can restore the entire VM with the help of previously created VM backups. 

Are physical servers outdated?

According to Statista, IT professionals worldwide estimated a nearly 50/50 split between on-site physical servers and cloud-hosted virtual servers in 2022. They estimate that ratio will hold through 2024.

So, despite the shift of workloads to the cloud, physical servers are vital to most businesses and play a crucial role in many IT environments. While physical servers are still relevant and utilized for a good portion of modern work cases, virtualization and cloud servers have gained popularity due to their benefits—including better resource utilization, scalability, and cost-effectiveness. 

When supporting your clients, consider their unique needs and make an informed decision based on an in-depth understanding of their business needs and challenges.   

Taking some of the work out of monitoring your clients’ server infrastructure can increase your MSP’s operational efficiency, freeing up time for you to focus on growing your business. Check out our eBook, Quiet the Noise: Automate Server Management with an RMM, to see how adopting an intelligent RMM solution can help boost your bottom line.

Making your decision on physical vs. virtual servers

Consider several key factors before recommending whether to use physical or virtual machine servers for your clients. This includes an evaluation of: 

  • Business performance needs 
  • Scalability needs and demands 
  • Budget constraints and considerations 
  • Cybersecurity concerns 

Physical servers: best fits

Resource-intensive applications

For clients that use demanding, resource-intensive applications or systems that require maximum performance or dedicated hardware, a physical server is always optimal. Examples of good use cases for a physical server include clients who work with large and complex databases, scientific simulations, or 3D rendering software. 

Security-sensitive workloads

Is your client’s security of utmost importance and crucial to their business success? Government agencies, financial institutions, and healthcare organizations working with highly sensitive data are among the best candidates for physical servers. 

Legacy systems

Clients with legacy systems, applications, or hardware may struggle to virtualize their IT infrastructure. In these cases—and in harmony with their overall budget constraints—it may be more effective to maintain physical servers as opposed to redeveloping the systems on a virtual server. 

Virtual servers: best fits

Dynamic business models

Is your client’s business highly flexible, with the potential to scale up or down rapidly and without warning? One of the most common examples is an e-commerce website, which can experience sudden and unpredictable changes throughout the year. Using a virtual server is often the most effective way to handle these fluctuations, thanks to their flexible scaling capabilities. 

Development agencies

Is your client in website or software development? In many instances, development and testing needs make virtual servers the best option, as they offer the added flexibility of providing multiple testing and development environments. 

Startups or smaller budget projects

If your client has substantial budget constraints and isn’t prepared to take on the additional cost of physical servers and configuration, virtual servers are best. This allows multiple VMs to run on a single server, reducing hardware and operational costs. 

Using a combination of servers

For many clients, leveraging a combination of physical and virtual servers may be the most efficient option. If your client has a mix of needs—such as seamless scalability and optimized security—consider leveraging a mix of servers. 

Another key element to consider is disaster recovery. By using a combination of physical and virtual servers, organizations can boost overall security and resilience. 

Lastly, you should clients on the possibilities of migration and transition. For some organizations with legacy processes or hardware, a gradual transition from existing physical systems to virtual infrastructure may be the most efficient strategy to minimize downtime and mitigate potential security risks. 

The right server option for your clients requires a thorough assessment of their business infrastructure and business goals. You should tailor each solution to meet your clients' unique business requirements and budget considerations. 

Once you and your client reach a decision, educate their team on the importance of regular reviews and adaptations to changing business needs. As a business evolves, so might its server needs.

Supporting client servers  

No matter what server you recommend for your clients, supporting your clients with relevant monitoring and management solutions is crucial to effective IT infrastructure management. 

ConnectWise RMM is a powerful out-of-the-box remote management solution equipped with 24/7 NOC services to reduce the routine burden and task load on your internal IT team. Start your free trial today to take the next step toward improving your ROI, all while delivering exceptional customer service. 


Most commonly, a physical server is a machine with a hard drive, CPU, processor, memory, and network connection to run programs and applications.

A virtual server is a software-based server that allows multiple virtual machines (VMs) to run simultaneously as computing resources are virtualized.

Advantages of using a physical server instead of a virtual server include: 

  • Simplicity and control
  • Singular use and function
  • Zero competition for resources
  • Optimized processing and performance due to dedicated resources

A physical server is a singular piece of hardware, while a cloud-based server operates in a virtual environment.

Backup is critical for physical servers as it can take several hours or days to restore a physical server. Creating a disaster recovery plan is necessary to minimize business downtime and avoid irreversible damage.

Physical servers require a system of protection for each individual server that is dependent upon the computing capabilities, resources, and data sensitivity. To ensure optimal security, servers should be monitored 24/7 via a remote network monitoring solution.