What Is Web Hosting? Definition, Types, and Key Considerations (2023)

For all online business owners—not just ecommerce entrepreneurs—the internet is your gateway to the world. Your website is a platform where you showcase your products or services, connect with potential customers, and do business.

Web hosting—the physical location of your website on the internet—is foundational to your online business. Without reliable web hosting, you put at risk your ability to run your business and meet your customers’ needs.

Understanding web hosting and how it works can be a daunting task, especially for those new to the concept. This article aims to clearly define web hosting, provide the different types of web hosting plans available to you, and outline the key considerations when choosing a web hosting provider.

What is web hosting?

Web hosting is the operation of internet-facing hardware and software that provides web services to end users. It is the place where your website and services are stored, processed and served from.

At its most basic, web hosting involves secure internet interfaces and communications, computer server hardware and storage, web server software, and content (text, images, audio/video). But most web hosting solutions also often involve hosting database servers, content management systems, ecommerce tools, security and authentication, and other applications that the websites rely on to function and stay secure.

Many organizations have made the decision to outsource the ownership and operation of their web infrastructure. Why pay for data center space, servers, software, and management when they can easily be rented and remotely managed? Commercial web hosting companies apply levels of expertise and economies of scale to this task that most organizations, and particularly small-to-medium businesses, cannot touch.

The web hosting industry is vital and is expected to grow by more than 20% every year between 2023 and 2028.

How much does web hosting cost?

Hosting costs vary, usually according to capabilities: You might pay $10 a month for a simple billboard-style site to advertise a business online, or you could pay much more if you’re running a busy ecommerce shop with a thousands of customers.

You only need to know your goals and know how to translate them into hosting needs in order to successfully choose web hosting that works for you.

Types of web hosting

  • Shared hosting
  • Dedicated hosting
  • Virtual Private Server (VPS) hosting
  • Cloud hosting

Shared hosting

Shared hosting involves several client websites residing together on the same server and sharing resources.

This approach is often used by individuals and small businesses, and works well when the sites do not require an entire server of their own. The client buys a plan, usually with a monthly quota for storage space and bandwidth use, and hopes the other clients do not consume too many resources.

Dedicated hosting

In contrast to shared hosting, dedicated hosting involves one or more whole physical servers dedicated to a client.

This allows for greater control and security, and helps ensure better and more predictable performance. The downside of this approach is higher cost and greater responsibility for server control and management.

Virtual Private Server (VPS) hosting

Virtualization allows for the creation of one or more “virtual computers” (i.e., a software emulation of an entire computer) running on a single server.

Virtual Private Server (VPS) hosting brings the economic advantages of shared hosting but with better performance and enhanced privacy, as each client’s virtual server is better protected from other clients.

Cloud hosting

Cloud hosting uses virtualization, highly-scaled hardware infrastructure, and sophisticated management software to enable hosting services for high availability and varying performance applications.

This approach enables greater performance flexibility by migrating virtual servers rapidly between real servers, adding or subtracting resources as needed. Cloud hosting is also great when you need to plan for growth.

Web hosting key considerations

Choosing the right web hosting model for your business is a critical decision that can significantly impact your website’s performance and scalability.

Each model has its pros and cons, so it’s important to assess your business needs, budget, and technical capabilities before making a decision. Here are some of the key considerations:

Storage space and bandwidth

These are hard costs that the hosting provider measures and charges for, often in tiered hosting packages. Many hosting providers promise “unlimited space and bandwidth”, but it is worth reading the fine print of the contract if you plan to rely on that.

More professional dedicated and cloud web hosting packages will call out maximums, or just charge a quoted rate for storage per week or month as your usage goes up and down.


Until you get up into the dedicated and cloud hosting models, it is difficult to obtain commitments on specific server resources and performance. Higher-end packages may include specifications of dedicated central processing unit (CPU) cores (or their virtual equivalents), page load times, and other performance-related metrics.

Domains and subdomains

You may need multiple websites, or multiple domain names which redirect to the same site or sites. Web hosting providers are generally happy to support this at a small cost.

Email services

Most if not all web hosting arrangements include some amount of email hosting capability. You may or may not need this, depending on your other arrangements and needs. Variables here include the number of email accounts allowed, space quota, and mail service interfaces support.

Software tools supported

This is one of the most important areas of differentiation. Many hosting packages include a website builder, an online tool that helps you design the structure and appearance of your website. Some packages include software like WordPress, PHP, ASP.net, and others, while others include database servers, either open source like MySQL or commercial products like Microsoft SQL.

Most hosting packages include some amount of malware and spam protection.

Administrative interface

There are many technical considerations to configuring and managing a web server (and all the things that go along with it). Make sure you preview this interface to ensure it offers the control you need, and make sure you understand your system backup options.

Web hosting: choose the best solution for your business

Web hosting is hardly a one-size-fits-all situation. Different sites seek to achieve different aims, and each one will attract different numbers and types of people. Hosting is the technical foundation that makes the site work, so the hosting package specs should be chosen around how basic or advanced a site’s functionality is.

Make the right decision and your website will be reliable, scalable, and not a drain on your business.

Web hosting FAQ

What is web hosting for?

Web hosting is how website owners secure digital “real estate” for their websites. For websites to remain active and accessible, data needs to be hosted on a server where it’s retrievable by web browsers. Web hosting services offer facilities required to maintain this accessibility.

Is web hosting free?

Web hosting costs vary a great deal, and are usually tiered depending on the type of web hosting and the scale of features like storage space and bandwidth. While many companies do offer free web hosting as an add-on to other services (such as a domain name or website management tools), typically web hosting is not free.

What are the types of web hosting?

– Shared hosting – Dedicated hosting – Virtual Private Server (VPS) hosting – Cloud hosting

What is the difference between shared hosting and dedicated hosting?

With shared hosting, a number of client websites reside on the same server and share resources, whereas with dedicated hosting, one or more physical servers are dedicated to hosting one client. Shared hosting is more common for individuals and small businesses, because of its reduced cost.


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