Minecraft server lag since updating to 1.8

If the server is hosted by a external company, contact them about the server issues. This problem can also be created by your wifi speed, you may want to run a speedtest.net scan on your wifi to make sure nothing is wrong. Also, if you are the one hosting the server, try connection through localhost:(port) next time to possible reduce lag. And one last thing, you may want to check if its not just minecraft thats lagging, you could have too many things installed on your computer or too much RAM being used at the time. Also, you may want to consider lowering the RAM usage for 3 players, if you are only hosting a vanilla server, with few slots you DO NOT NEED 2GB, a bukkit server with 10-20 slots needs about 1 GB, so lower the RAM usage if your hosting and yeah! :)