VPS or CDN?

I'm also very interested on this subject as i'm getting more and more trafic so...

I'd suggest to buy a VPS in your situation. CDN mostly works for heavy traffic sites or sites which have a broad audiences that more than one countries.

I have set up a few sites on DigitalOcean VPS and they perform pretty well, which only costs 5$/mo with 512 RAM and 20 G SSD. It's fair enough for small site hosting.

Linode is also a pretty nice candidate for VPS hosting.

As Per your requirement you can opt for VPS Which will work best for you to manage your heavy site.

I'm a little confused by the question. Are you talking about Virtual Private Servers (VPS) and Content Delivery Networks (CDN)? If so, it's not really a matter of choice -- they have different purposes.

A CDN is a way of serving static files (and only static files) from locations that are physically closer to users. For instance, you might store your images, JavaScript and CSS files on a CDN so that a user from London will get their files from an Irish server, a user in New York will get their files from a server in Virginia and a user in Japan will get their files from China. Unless your website is entirely static, you cannot host a website using a CDN alone. Regardless, I don't think a CDN is really necessary for most small websites (though I use one so I'm not exactly following my own advice!)

A VPS is like having your own server which means that you can run just about anything the installed OS can run, including dynamic websites such as WordPress, Drupal, OpenCart, etc. Of course, you also have to manage your server, so if you don't know anything about systems administration, this might be more than you want to take on. The other thing about a VPS is you get what you pay for. Cheap VPS providers often oversell their machines, so your hoped-for performance gain may not even pan out. I use Amazon Web Services/Rackspace/Azure, but they're not cheap nor really designed for non-professionals. I've been doing web development and DevOps professionally for about 15 years, so I can live with that.

If I had a small site, a limited budget and limited time for or knowledge of systems administration, I'd look for a good, reliable and fast shared host. Rackspace also has managed cloud servers, but those are pricey (though still less than what you might pay a sys admin). One thing you could do is create a subdomain (e.g., http://static.yoursite.com) to host your static files (and only your static files) to offload those requests to a different box (I'd host it on S3 or similar). Basically you'd have a non-distributed CDN to serve static files quickly and a cheaper server to serve dynamic content.

Alternatively, if you still like the idea of a CDN, you could also look into something like CloudFlare (Home | CloudFlare | The web performance & security company) which has a free level that you might be able use alongside (or really in front of) your VPS or shared server or whatever else you use.

Thanks for the input, people.

So as I understand, VPS could only work if I am knowledgeable enough in managing my own server and everything related to that? In that case, this isn't an option for me. I've never worked with VPS and have no experience in that area.

How do managed Wordpress hostings compare to regular shared hosting like Hostgator? Anybody can chip in? I'm trying out the most basic option on WP Engine and when compare them to Hostgator with two identically fresh websites, they both perform the same. I see no difference in speed between Hostgator and WP Engine, only except that WPE is performing a little better in Texas but way worse in Europe (Netherlands); WPE costs $30/month while HG costs $11/month, so... Thoughts?