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It might seem like all web hosting is the same. If that’s true, then you might as well just get the cheapest plan available. That would make things simple, wouldn’t it? Unfortunately, it just isn’t the case. Alternatively, if you’ve done any shopping around for web hosting, it might start to seem like there are just two different types of web hosting: cheap or expensive. This would make things easier, too — buy the expensive one if you can afford it, otherwise get the cheap one. But actually there are several different types of web hosting, at a wide variety of price points.

It seems confusing at first, but once you understand a few simple terms it should be easy to figure out what type of hosting plan you need.

Common Types of Web Hosting

Shared Hosting

Shared hosting is the most basic and most common form of web hosting. If you’re looking for cheap hosting, this is it. The price usually runs $5 or less per month.

But, as usual, you get what you pay for. The cheapest web hosting is not going to be the best web hosting.

Shared hosting is called “shared” because the way it works is that several different customers all share the same server. In fact, “several” could mean a hundred or more — shared hosting providers like to put as many customers together as they can because it reduces their expenses.

All the websites of all the customers that share the same server are all drawing from the same limited set of resources — computer memory, CPU processing time, bandwidth, and disk space. For low-traffic, non-critical sites, this isn’t really a problem. But if any of the sites on the server start to draw a lot of resources — either because of a traffic spike or some other cause like bad coding — it will negatively impact all the sites on the server. This could cause page load slow downs or even errors and downtime.

Shared hosting plans usually are advertised with several “unlimited” features: unlimited bandwidth, unlimited websites, unlimited storage. It’s important to realize that “unlimited” usually isn’t unlimited in actuality. Shared hosting providers almost always reserve the right to throttle website traffic or require a plan upgrade if a customer exceeds certain “soft limits,” which are only known internally. Additionally, certain types of hosting activity (streaming video, file sharing) is usually prohibited by the Terms of Service.

Shared web hosting is great for personal blogs, community groups, and small non-tech businesses. They work very well if you do routine things with them (like running a basic WordPress blog) and don’t get to much traffic (between 1000 and 2000 on a really good day).

For anything larger or mission-critical, other hosting options should be considered.

VPS — Virtual Private Server

VPS plans are the work horse of the web hosting world. If you’re not sure what you’re going to need, VPS plans are usually a good idea. They are flexible, scalable, and decently priced.

A VPS is a virtual machine — a computer that exists as software on another computer. Hosting companies group large pools of servers together into giant “super” computers called clusters. Then they run virtual machines on top of that cluster, which you can get access to as a customer. Unlike with shared hosting, you are the administrator of the machine and there are no other customers on it.

This gives you more access to computing power and server resources than a shared hosting plan. (Even though the hardware is shared, it is provisioned differently, so VPS works out better for users.)

In addition to the increase in power, VPS plans give you more direct control over the server. You are the administrator and can usually do anything you want on it, including installing new software.

VPS plans are a good choice for most enterprise software needs, including ecommerce, web development, and office productivity.

Dedicated Server

A dedicated server plan is a hosting plan that actually provides you with a real, physical server — not a virtual one. You could actually go to the data center and touch it if you wanted to.

Dedicated servers have some limitations as compared with Virtual Private Servers. The biggest issue is that the a dedicated server plan is ultimately limited by its physical reality. There is only so much disk space, so much memory. Unlike with VPS on a cluster, there’s no way to easily add more power to a dedicated server without upgrading the actual hardware.

For most businesses, a VPS is going to be a better choice than a Dedicated server. The major exception to that is any business that needs to keep tight control over its data and software, especially for regulatory purposes. Financial services institutions and medical service providers may need dedicated servers in order to safeguard their client’s information.

Cloud Hosting

Cloud is a marketing buzzword that means something and also doesn’t mean anything.

What it actually refers to is when a large group of computers are tied together to form a large pool of computing resources, like a cluster.

Most VPS plans are actually sitting on top of just this type of “cloud,” as are most shared hosting plans. It is the most sensible way to build server infrastructure for a web hosting company, so it is what most of them do.

Therefore, “cloud” being used in web hosting marketing material is usually meaningless — it refers to something all of them are doing anyway.

Other types of web hosting

Managed Hosting and Unmanaged Hosting

Managed hosting is a service where the hosting company provides a high degree of service and support, usually in relationship to a specific application or platform. For example, there are a number of companies offering Managed WordPress Hosting.

Most web hosting plans are unmanaged.


Colocation isn’t exactly a form of web hosting, it is a form of space rental. A colocation center is a datacenter that provides space, power, and internet connection so that customers can house their own server equipment. Colocation centers usually provide security, climate control, and fast internet.


Reseller hosting plans are plans that allow you to purchase a large amount of computing power ahead of time, and then resell hosting plans to other people.

Hosting Frequently Asked Questions

  • Can I add a firewall to a shared plan to increase security?

    Many hosts will offer some version of firewall protection, even for shared plans. Be careful, and make sure you know what you’re actually getting.

    A shared firewall that’s just monitoring traffic going in and out of the server will help protect you from things on the outside, but not anything that has already infected another client on the same server.

    Many hosts also offer dedicated firewall protection for an extra fee. If security is important to your site, this is definitely a better option. It works both on the hardware and software levels, so it can monitor your specific partition on the server.

    Even with a dedicated firewall in place, you still won’t have the same level of security as with VPS or dedicated hosting, but it can provide decent, cost-effective protection.

  • Since VPS accounts still share the same servers, do they have the same security risks as shared hosting?

    With VPS hosting, despite sharing the same hardware as several other VPS accounts, your actual server is completely separate from every other server.

    If one server becomes infected with a virus or other vulnerability, that issues is contained within its own virtual environment.

    Shared hosting is more akin to having multiple users on a single Windows workstation. If your kid downloads malware while trying to install her new favorite game, every other account on the computer is put a risk.

  • As a reseller, what kind of hosting can I offer?

    You can offer any kind of hosting you want, dependent on the hardware and software available to you from your host.

    Most reseller packages will allow you to offer shared and VPS hosting, but some may restrict you to just shared hosting.

    Some providers will even give you the option to resell dedicated hosting, but that will be much harder to find and more expensive.

    Be sure to do your homework and ask plenty of questions before signing a contract.

  • How does dedicated hosting compare to VPS hosting?

    Dedicated hosting, in most cases, is going to provide the fastest, most customizable and secure hosting experience.

    While VPS hosting allows for very easy increases in resources, they are ultimately bound by the hardware they are placed on, which is shared by many other VPS clients.

    With a dedicated server, you have a finite amount of resources available to you, but those resources are completely your own.

    With a VPS server, while you typically have root access to your server, your host may place some restrictions on software you can install and the resources you can utilize.

    With dedicated hosting, you have complete freedom. In terms of security, both offer similar levels of security from outside vulnerabilities.

    However, dedicated hosting typically provides a higher level of security from inside threats, including your hosting provider.

    This difference makes dedicated hosting particularly attractive for businesses holding highly-confidential information.

  • What is the difference between colocation and dedicated hosting?

    Like dedicated hosting, with colocation you will have exclusive access to the server equipment.

    The big difference is that you are also responsible for providing and maintaining the physical hardware.

    Colocation is a lot like setting up a server in your basement, except someone else is providing the electric, air conditioning, and internet access. With a colocation setup, if the computer fails, it’s your responsibility to fix it.

    Likewise, if you outgrow your current system, you’re responsible for adding a new hard drive or upgrading to a faster CPU.

    With dedicated hosting, the host maintains all of the server equipment, and the only thing you’re responsible for is the software it’s running.

    If you need more storage, you request it from the host and they will add an extra hard drive (for a fee, of course). If you need more system resources, they will assist you with the migration to a new server or do it for you.

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