Shared Hosting
Shared hosting is exactly what it sounds like. Your site shares a web server – the same physical computer - with any number of other sites. Usually, it will share the same IP address with those other sites as well. Shared hosting is a lot like living in a big apartment building. How happy you are will often depend on your neighbors. If the other websites you’re sharing server space cause trouble, it can mean very bad things for your website.
For example, if one of the other sites runs a script that causes the web server to crash, your website (and everyone else’s on that server) will go down. If another site does something to get banned from the search engines and you share the same IP address, your site may be banned as well. This is almost always a very bad thing, and very difficult to recover from.
Normally, a good web host will keep very close tabs on other sites to make sure they aren’t doing anything that will adversely affect the server, but your web hosting company simply can not and will not do anything about the problem of search engine banning. It’s not the hosting company’s fault; it’s just a fact of life.
Dedicated Hosting
Dedicated hosting is like renting a house – the web server is all yours, and you don’t have to worry about other people’s websites causing problems for you. Unless your web host is doing something very strange, your dedicated server will have an IP address that is yours and yours alone. For websites that rely heavily on search engine rankings, this is very important.
When you choose dedicated hosting, you are renting a physical server, the rack space it uses in the datacenter, and the bandwidth used. Not only is this far more expensive than shared hosting, it can also be problematic if you don’t have any experience configuring a web server. Often, the cost of one-on-one technical support is bundled into the cost of dedicated hosting. If you have never set up a web server before, DO NOT attempt to do it without help. For novice webmasters, the cost of the tech support is usually well worth it.
On the other hand, dedicated hosting can be a great option for tech savvy webmasters who have the knowledge but not the upfront cash to buy their own server. Servers usually cost around $10,000, and that’s money that can be better spent on advertising in the initial months. If you can get them to lower the price by doing the normal server administration yourself, all the better. But I cannot stress enough that you MUST know what you are doing, or your website will be in big trouble.
Making the Right Hosting Choice
So when does it make more sense to use shared hosting for an e-commerce website? The short answer is when you’re starting a new site and you’re on a budget. When I started my first website, I didn’t know if it was going to make any money at all. Profitability was the most important thing to me, and shared hosting was a good way to get proof of concept without risking my entire savings account.
Now that things are looking positive, my concern for keeping the site up and running is growing. At this point, I’m looking for dedicated hosting to help me sleep a little better at night. If things continue to go well, I’ll spring for my own server in a colocation facility.
If you have a decent budget for your website and want to jump right into dedicated hosting, go right ahead. It’s not a bad idea if you have the cash and want to dedicate yourself fully to business development, since it’s one less thing to worry about.
As I said, it’s a very personal choice and depends heavily on your technical expertise and your business plan. If you’re still having trouble deciding, I would recommend looking into Virtual Private Servers, or VPS. VPS is a relatively new middle ground between shared and dedicated hosting.
Virtual Private Servers Hosting
VPS Web Hosting is a middle ground between shared hosting and dedicated hosting. Some say it provides the best of both worlds, others insist that it’s nothing more than marketing hype. To truly understand VPS hosting, we’ll have to take a closer look at what it is and the technology that makes it possible.
Like traditional shared hosting plans, VPS hosting keeps several web sites (multiple customers) on a single physical machine. The big difference between shared hosting and VPS hosting is in the software running on the web server. The VPS software partitions each customer out into their own "Virtual Server", each complete with their own operating system. Each virtual machine is completely independent from the other. You cannot cross between them, and they act exactly as if they were completely independent machines.
By insulating each customer within their own virtual sandbox, VPS hosting eliminates most of the problems you tend to encounter with shared hosting. If someone else is running a script that runs amok, they can only take down their website – not yours. And since you almost always get your own IP address, you won’t suffer the effects when someone else gets their site blacklisted from the search engines.
From the web hosting company’s perspective, VPS hosting is a great technology. It allows them to safely host more customers on a single box, which is more efficient AND allows them to offer better hosting for less. Many sites are only able to utilize a small portion of a high-end web server’s processing capability, and VPS technology allows them to do so in a much safer environment. VPS is a very good compromise between shared hosting and dedicated hosting, and the technology really works.
Of course, VPS isn’t for everyone. While it’s cheaper than dedicated hosting, it is substantially more expensive than shared hosting. If you’re running a personal website with a reputable hosting company, shared hosting is going to suit you just fine. There’s really no need to pay the extra premium. But if you’re running an e-commerce site, VPS is a big step up in security and reliability for much less than dedicated hosting.
