Measure the workload
Consider CPU, memory, storage behavior, network and expected peaks. Leave operational headroom for backups, updates and normal growth.
Understand isolation and constraints
Virtual and dedicated offerings differ by provider. Review the actual resource and storage guarantees rather than relying on the category name.
Plan failure and growth
A larger single machine remains a single failure domain. Compare the recovery path, replacement process and options for scaling the application.
Compare operating responsibility
Both options need access controls, maintenance and application ownership. The choice should fit the team's ability to operate the system and the business's tolerance for interruption.