Hosted servers and/or storage generally gives you more options and better service. Your servers or ones you specify are located in a specific site that provides more physical security, multiple high-speed internet connections, and redundant clean power than most companies can afford.

Cloud services are hosted in multiple possible locations for added reliability, but are more limited in what can be moved there. If you just need email, word processor documents, spreadsheets and web-pages, this is all pretty easy. If you are a veterinarian who has a special application that tracks medication, or you’re a shipping company with a custom database and tracking application, you may not be able to easily (or at all) move this sort of thing to a cloud services provider.

In both cases, you’re also limited to your Internet service. If your ISP connection goes down for a day, you aren’t getting anything done that day either.