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This is largely dependent on your requirements, do you run .net and other Windows only applications or require Microsoft Exchange to be hosted? If so then of course Windows is your only option and most companies offer Windows 2003 to 2008 server or higher. Many people choose to stay with 2003 Server unless they have a very high-end specification VPS server (with lots of RAM and CPU) since the newer versions have higher requirements for memory.
Our recommendation is to avoid Windows if at all possible in exchange for Linux as Windows Servers are much more commonly hacked and exploited and are more likely to have performance issues than an equivalent Linux server. This is simply an inherent problem when it comes to Windows security and exploitable vulnerabilities that often hit servers before they are publicly discovered. If data protection and privacy are important to you, we strongly recommend avoiding Windows.
Most of the web today uses a Linux or Unix based OS because they are simply the quickest, most efficient, stable and secure compared to anything Windows can offer. This is not to say you'll never be hacked or be exploited, but with good security practices the chances are minimal when compared to Windows.
The only downside of LInux is the learning curve for those unfamiliar with it. If you have staff familiar with Linux this shouldn't be an issue, and if you don't have the resources then most companies offer a "Managed" option which let's them take care of the basic and routine tasks of maintaining and running your Linux server.
How Much RAM do I Need?
We generally suggest getting as little as possible but in a business environment it is better to get a bit more than you need since a sudden influx of traffic could cause your server to become slow or even crash if there is no SWAP or just from slow SWAP performance. If you are quite confident about your past usage and server usage then certainly choose the least amount of RAM that has worked well for you. With VPS Servers, it's easy for your host to upgrade your RAM with little or no downtime. As a bare minimum though you'll need 128MB to run most Linux OS's and even more if you are running any control panel. 256MB for Directadmin and 512MB for both CPanel and Plesk.
How Much CPU do I need?
You can never have too much CPU, be careful of companies talking about their powerful 8-core servers but often only give you access to 1-core or restrict you to a low frequency of CPU use such as 700Mhz etc.. Our honest preference is to have at least access to 2-CPU cores but of course this generally costs more as you get more dedicated CPU cycles and access to more cores.
How much HDD/Hard Drive Space do I need?
We would suggest a minimum of 5GB as most OS's take on average .5-1GB of space alone. If you are just hosting a few small websites or even dozens, this is likely enough space for now but we recommend monitoring your usage since your server may crash or services may become unavailable if you run out of disk space.
Keep in mind that logs take space and database/content/image driven websites with interactive content/user uploaded content could be used up quickly if you have a large amount of visitors/users.
Backups should be made both on your server and off-site, including through your host for added security in the case of hacking or hardware failure on your server.
How much bandwidth/traffic do I need?
Depending on the purpose of your server, you may not need much at all. Many people are drawn in by packages which promise hundreds of GB of transfer or even TB's (terabytes) but this is often a bad idea and a sign that your provider is oversold. Most providers would be knocked off-line or extremely lagged if every customer tried to use a fraction of those oversold plans. The reality is that most servers and sites use a very small amount of bandwidth.
Unless your server is hosting large amounts of images and video, you likely won't need much bandwith and 50GB or 100GB is likely more than you'll use each month. Many times providers with lower bandwidth limits will deliver better speeds and have a more reliable network, as the abusive users who use excessive bandwith often flock to the oversold bandwidth plans and for this reason, businesses are advised to stay away from companies who oversell their bandwidth.
One other point about oversold bandwidth is that some companies will cut you off or warn you if you start using a lot of bandwidth even though your limit is not exceeded (this rule is usually buried in the TOS) that your usage can't affect other clients. Other hosts secretly or openly restrict your port speed to 10mbit or less which makes it very unlikely you will be transferring even a small fraction of your allotted bandwidth per month. We recommend choosing plans with at least a 100mbit port to avoid slow-downs during peak times or if you get a surge of visitors/activity on your server.
What should I do for backups?
We recommend a 3-tiered backup system and to keep at least a month of archives or more.
1.) Use your host's backup service (it is worth the money in the event of hacking, failure/dataloss).
2.) Take your own backups nightly and store them on your server.
3.) Transfer your backups off-site to your office or another server you have.
The server is running RAID, do I need backups? Yes, many hosts have had completely array failures which results in lost data and sometimes for other reasons the backups don't work or are also lost.
Remember that RAID doesn't protect against hacking and intentional/accidental data deletion. Many companies have found this out and it has cost them clients and huge amounts of money.
What kind of VPS architecture/technology should I choose 32-bit,64-bit and should it be OpenVZ, Virtuozzo, Xen, KVM or another technology?
Sometimes you may not have a choice depending on the company (most companies specify this or allow you to choose this before you pay and checkout). There is no performance reason to chose 32 or 64-bit but often 64-bit has issues with compatibility and especially with Windows is often a better choice. For most applications it does not matter but if you have any doubts we recommend 32-bit if possible.
These are essentially the same technology and OpenVZ is funded by the commericial company known as Parallels who develops Virtuozzo from OpenVZ. The performance and reliablity of both is essentially the same and both have been used for years in mission critical environments. The one-drawback is that you must ensure your resources are set correctly by your host and that you don't exceed your allocated RAM, this often leads to application/service failures if this is the case. But a well-managed example well probably give you the most for your money and if you choose a reliable company it is a great choice for any business.
One other drawback is that for those who need to load kernel modules, this must be done by your host and not all kernel modules can be loaded and used as normal. For those who are just using it for e-mail hosting/web/database etc.., this will not be an issue or consideration.
Xen is another very well polished and well-performing technology. One draw-back is that if the drivers are not configured properly, Xen can often be slower than OpenVZ, especially if using a disk-based image rather than LVM. Xen is closer to an actual server than OpenVZ since you can load your own kernel/modules but it's also more likely to fail in a way that causes your server not to boot. Xen can perform very well but in reality often underperforms OpenVZ/Virtuozzo.
KVM in effect is similar to Xen but less polished but also has excellent performance but has less-polished and commercially available support and tools. At this time we don't recommend KVM and would recommend Xen for many reasons than we have time to get into here.