Datacenter vs. Residential Proxies: Which to Choose? in 2024

There is a large proxy IP network market available for various business purposes.¹ However, it is challenging to understand which proxy server is the best solution for your use case. To choose the best proxy solution for your company, you must first understand the various types of proxy servers and their main capabilities. 

We examine the key differences between the two most common proxy server solutions, datacenter and residential proxies, to help you choose the right proxy solution for your business needs. 

Top datacenter & residential proxy providers of 2024

The proxy providers indicated in the table below offer datacenter and residential proxy services. We filtered proxy providers based on these verifiable criteria:

• Number of B2B reviews: 5+ reviews on review platforms, including G2, Trustradius, and Capterra. 
• Number of employees on LinkedIn: We included vendors with  10+ employees on LinkedIn.

What are Datacenter Proxies?

Datacenter proxies (DC proxies) are intermediaries between a client (requester) and a web server (destination). Datacenter proxies assign clients IP addresses that belong to data center proxy pools and third-party cloud service providers. Datacenter proxies are divided into two groups based on the number of clients who share an IP address. 

1. Shared datacenter proxies

A shared proxy is an IP address that is used by multiple users at the same time (see Figure 1). Shared proxies are more cost-effective than dedicated datacenter proxies since they assign the same IP address to multiple users. 

For example, when a client makes a connection request to another country’s web server, a shared datacenter proxy assigns the client a random IP address from the shared proxy pool that belongs to the target country. 

Users share the same bandwidth to exchange data between devices when using shared datacenter proxies. Shared bandwidth slows data transfer and browsing speed. As the number of clients sharing the same IP address with you increases, the IP address will become overburdened by the number of requests. 

Learn more about how shared proxies work and their use cases. 

Figure 1: Overview of how shared proxies operate.

Source: Shared Proxies: How It Works, Use Cases & Best Practices

2. Dedicated datacenter proxies

Dedicated datacenter proxies are not shared or used by another client (see Figure 2). A dedicated (or private) datacenter proxy assigns a specific IP address to a client from the target dedicated datacenter proxy location and is used only by a single user. It provides complete control over all IP address activity. Unlike shared datacenter proxies, dedicated datacenter proxies provide stable speed and performance. You do not have to share bandwidth with other users using a dedicated datacenter proxy solution. 

Learn more about dedicated proxies, how they work, and when & why you should use them.

Figure 2: Proxy server types based on  the number of people who share an IP address

What are Residential Proxies?

Residential proxies use IP addresses provided by ISPs (Internet Service Providers) and assign real IP addresses to clients. Since the source of IP addresses is associated with ISPs, they are hard to distinguish from regular users and detect as proxy users by websites. 

We compared the top 10 residential proxy service providers of 2023 based on performance, pricing, and features to help you make an informed decision.

We compared the top 10 residential proxy service providers of 2023 based on performance, pricing, and features to help you make an informed decision.

Sponsored 

Bright Data’s Residential Proxies provide users with IP addresses provided by ISPs (Internet Service Providers), allowing them to access geo-restricted content, circumvent anti-scraping techniques, and smooth web scraping without revealing their true identity.

Datacenter vs. Residential Proxies: what are the main differences?

1. Source IP

The source of the IP address is the main difference between residential and datacenter proxies. Residential proxy IPs are assigned by ISPs that belong to real people. (e.g., someone’s phone or computer), whereas datacenter proxies use cloud servers and data center’s IP pools. 

2. Use case evaluation

Both datacenter and residential proxies can be utilized for the following use cases. However, to get the most out of a proxy solution, you should be aware of the primary differences between the two and select the proxy solution that best fits your use case.

3. Proxy anonymity level

Unlike residential proxies, datacenter IPs are not associated with an internet service provider. This makes it easier for websites to identify proxy users and block them from accessing the website content.

In contrast, residential proxies use real users’ IP addresses; it is harder for websites to block residential proxies. 

Proxy servers are divided into two types based on their IP source rotation: static proxies and rotating proxies. Static proxy solutions include datacenter and ISP proxies. For example, when a client requests a web server to access content, a static proxy server assigns the client a fixed IP address from a pool of data centers for each connection request. 

However, if you intend to collect a large amount of data, you must constantly rotate your IP address to avoid revealing your actual IP address. Otherwise, the website you’re trying to scrape will suspect your activity and block your IP address to prevent data scraping. Residential proxies, as opposed to datacenter proxies, rotate clients’ IP addresses each time they connect to a website (see Figure 3). 

Figure 3: Representation of a proxy server working process.

Sponsored

Oxylabs’s rotating ISP proxies enable users to change their IP addresses for every request they send to the target website or after a specified period. Because your IP address changes frequently, it’s less likely that your activity will be identified as suspicious by the target site. 

4. Speed 

Datacenter proxies are faster than residential proxies because their IP addresses are sourced from a remote cloud server. If you need to complete tasks quickly, dedicated datacenter proxies are a good option. Because shared datacenter proxies are overused, they perform slower than dedicated ones.

5. Cost

Residential proxies offer a high level of anonymity and extensive geo-location targeting options. For this reason, the cost of residential proxies is typically higher than that of datacenter proxies.

Datacenter proxies use cases

1. Accessing geo-restricted content

Some websites block or restrict access to specific content or services for specific regions based on the IP geolocation of users.

For example, when you connect to a website, your machine sends an HTTP request to the target web server. If you are not using a VPN, proxy server, or headless browser, your geolocation and other device information is sent to other devices via the HTTP header. If you are in a restricted area of the website to which you want to connect, the web server will block you from accessing the content.

Datacenter proxies provide clients with a new IP address from a data center pool location that is not blocked by the target website.

Sponsored

Smartproxy provides 100K+ Datacenter IP pools worldwide. Smartproxy’s datacenter proxies assign clients a new IP address with each connection request and deliver data at <0.3s average speed.

2. Ad verification

Datacenter proxies enable marketing teams and ad agencies to ensure that:

• Campaigns appear in the desired locations.
• Detect malicious activities such as click fraud.
• Keep track of the performance of ads that appear in various geolocations.

To learn more, see ad verification: top 5 methods and their benefits.

3. SEO Monitoring

Businesses use SEO to boost their visibility and reach out to potential customers. On the other hand, ranking in search results is difficult in a dynamic competitive environment. Businesses leverage various SEO tools to get the most out of their SEO efforts and practices.

Web scrapers are one of the automatic data collection tools for tracking the success of business SEO strategies. It is, however, difficult to monitor your keyword rankings without being blocked by search engines. You can integrate a datacenter proxy server into your web scraper to access localized organic search results and accelerate data collection processes.

Residential proxies use cases

1. Review monitoring

93% of customers say that online reviews have an impact on their purchasing decisions. Review monitoring enables eCommerce businesses to identify pain points in their processes and empower customers along their decision-making journey. ²

Customer reviews will help you improve your products and services based on their expectations and needs. It also allows brands to inform and educate current and potential customers about their offerings and uniqueness. 

To educate and empower customers during the purchasing process, you should track social mentions of your brand and collect customer reviews from your social media accounts, website, and third-party marketplaces. However, you may need to crawl and scrape hundreds of product pages to obtain enough customer review information for your data analysis. Residential proxies are an ideal solution to extract large amounts of review data from websites.

Learn how to scrape review data from web sources step by step.

2. Travel fare aggregation

Obtaining dynamic real-time data is crucial in the travel industry to adjust prices based on current market conditions. For example, room and flight prices are constantly changed based on different factors such as sales volume like off-peak times and the number of seats/rooms left. 

Web scraping enables travel agencies to gather real-time travel data from competitors’ websites, blogs, social media accounts, travel booking platforms, and even Google Maps. Residential proxies are more difficult to blacklist. They enable travel agencies to collect publicly available data from well-protected websites without the minimum risk of being blocked.

Check out 5 common web scraping applications in the travel industry to learn more.

3. Brand protection

According to Forbes, a significant number of customers have lost trust in third-party websites, with eBay (80%) and Amazon (53%) receiving the most votes for selling counterfeits online.³

Web scraping is one of the brand protection strategies that copyright holders can use to identify fraudulent websites and unauthorized sellers. Web scraping tools help businesses monitor and protect their intellectual property from unauthorized third-party use. You can integrate residential proxies into your web scraper to circumvent IP blocking while ensuring anonymity.

Datacenter vs. Residential Proxies: which to choose?

Figure 4: Comparison of datacenter and residential proxies based on key differences.

Web scrapers integrated with proxies help businesses increase the success rate of web scraping projects. Both datacenter and residential proxies hide clients’ real IP addresses while browsing online. However, there are some significant differences between them that you should be aware of when selecting a proxy server for your use cases (see Figure 4).

For example, if you intend to scrape a large amount of web data from well-protected websites, you should use residential proxies to avoid revealing your true identity. Residential proxies allow for smooth web scraping while ensuring your anonymity. 

However, if you are looking for a cost-friendly solution to mask your IP address and security is not your main concern, datacenter proxies would be the best option for your data collection tasks.

More on proxies

• Forward vs. Reverse Proxy: Overview, Benefits and Use Cases
• HTTP vs SOCKS Proxies: Benefits and Technical Overview 
• Firewalls vs Proxy Servers: Overview, Techniques and Benefits

Also, don’t forget to check out our sortable/filterable list of proxy service / server.

For guidance to choose the right tool, reach out to us:

External Links

• 1. “Global Internet Protocol Proxy Networks Market (2019 to 2025)”. businesswire. June 3, 2020. Retrieved December 15, 2022.
• 2. Frichou, Flora (November 9, 2020). “9 Proven ways to use reviews to smash all sales records this Q4 and beyond“. Trustpilot. Retrieved December 15, 2022.
• 3. Sularia, Sanjeev (Mar 15, 2021). “Combating Gray-Market Activities And Protecting Your Brand (Part I): Challenges And Threats“. Forbes. Retrieved December 15, 2022.