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Hosted vs Self-Hosted Software

Hosted software means the software runs on someone else’s server, and they maintain it. Examples are if you have a blog on WordPress.com  or a website through Weebly, or another site where you log into their website to use their software. They maintain the service and the code, and you just use it. You pay for the service, not just the software.

Self-hosted software means that you install the software on your own account that is hosted with a web hosting company.  You pay for the software, but you install and maintain it yourself. For example, this blog is made using WordPress software, but I installed it on my own server and keep it updated myself.

Decisions are all about trade-offs, so here is how these options stack up.

Hosted Software


  • It’s very easy. You just sign up and go.
  • You can ask for support anytime and the cost is included in your subscription.
  • You don’t have to worry about installing updates, getting hacked, or other headaches that come with hosting your own software.
  • Service usually runs on high-availability servers that don’t often have downtime and are optimized to run the software.


  • Customizations will be limited. For example, WordPress.com comes with standard functionality that meets most people’s needs, but you can’t install your own plugins.
  • Depending on how the licensing works, it may be more expensive as it is a monthly fee rather than a one-time fee.

Self-hosted software


  • You can customize your software as much as you want. For example, with self-hosted WordPress, there are thousands of plugins and themes to choose from and you can write your own or hire someone to create custom plugins for you.


  • Hosting your own software comes with a lot of headaches. You need to keep your software updated so it does not get hacked. Installing updates can sometimes break your site. If your site does get hacked, you may need to pay to get it cleaned up. You may also lose valuable data or have downtime.
  • If you want high-availability hosting, it can be expensive.

How to Decide

Similar to the decision off Custom Software vs Off the Shelf Software, it depends on how core the software is to your business value and processes, how much it costs to get what you want, and if you prioritize ease or control.

The exact choice you make depends also on the kind of software you need and what options are available. Here are some questions to ask yourself:

  1. Am I willing to give up some control to not have to worry about the technical aspects of hosting (or keep a web developer on call if something comes up?)
  2. Does the value my business offers depend on customization that I can’t get through hosted software?

Sometimes you can have the best of both. One reason I always recommend WordPress as a content management system is that you can start out being hosted at WordPress.com, and then easily export your content if you outgrow their system and want to move to the self-hosted version of their software. Most software products don’t offer that kind of flexibility.

Questions? Leave them in the comments.

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