A VPS keeps the first step compact
A virtual machine is usually easy to provision and size for a modest application. The underlying host is shared, and the resource policy determines how that sharing behaves. Ask about CPU allocation, storage contention and resize limitations.
Dedicated hardware gives a broader boundary
A physical server can suit sustained compute, large memory footprints or your own virtualisation layer. You need to plan the storage layout, hardware failure response and migration path. A larger machine can also create a larger single point of failure.
Compare complete operations
Consider backup cost, IP needs, licences, monitoring and the time required to maintain the system. A managed database or application platform may be more appropriate when your team cannot own those responsibilities.
Use measurements to move
Start with a representative benchmark and observe production demand. Move to dedicated hardware when sustained constraints or system requirements justify it, rather than treating it as an automatic next level.