When it comes to web hosting, there are a lot of options for business owners. Most business owners don’t know (and don’t need to know) much about web hosting, especially if you have an internal team or managed IT services provider handling your company’s IT.
But that doesn’t mean you shouldn’t be familiar with web hosting as a business owner. Even if you don’t know the nitty-gritty details about what each option provides (and doesn’t provide), any business owner would benefit from at least being generally familiar with the different types of hosting out there for businesses.
With that in mind, we’ll cover the main types of web hosting for businesses in 2024 – including the pros and cons of each, so you, as the person who’s taking on all the risk of signing up for a web hosting service. Let’s dig in.
The Three Main Types of Hosting
Shared Hosting
Shared hosting involves multiple websites being hosted on a single physical server. This server can be a leased server, such as AWS or Google, or it can be a physical server on location that you share with other businesses (something that is extremely rare).
Shared hosting is one of the most common types of hosting as it’s the most economical option. Shared hosting is great for small static sites, personal blogs, or other businesses where the website is the least-important part of the sales funnel, or for websites that do not require extensive resources or high-traffic bandwidth.
Dedicated Hosting
At the other end of the spectrum is dedicated hosting, where a client leases an entire server just for themselves – ensuring that their server is not shared with anyone else. Businesses with high-security needs, companies with extreme tech, bandwidth or IT infrastructure needs, or businesses that have high traffic volumes all the time should use dedicated hosting, as this option is the safest and most robust of the three server options.
Dedicated hosting also offers the highest level of resource availability and control, making it ideal for high-traffic sites and large businesses that require extensive software customization to succeed.
VPS Hosting
VPS hosting is a newer addition to the hosting game, and as you might expect, it strikes a middle ground between both dedicated and shared hosting. It does this by using a shared server to create “dedicated” servers within that shared server, each of which is fully partitioned from the other servers hosted on that physical server. Makes sense, right?
In short: while websites and users on a VPS share a physical server, each has its own dedicated portion of server resources, all of which are split off from the rest, ensuring no overlap between users. VPS hosting is a good middle-ground option providing better security and resource allocation than shared hosting but is more cost-effective than dedicated hosting. It’s not as cheap as shared hosting, but not as expensive as dedicated servers, and offers a nice blend of the pros and cons of each.
Hosting Solutions for Businesses: The Pros and Cons
Pros and Cons of Shared Hosting
Pros:
- Cost-effective and user-friendly, ideal for beginners.
- No need for technical maintenance on the user’s part.
- Includes built-in cPanel for managing the website.
Cons:
- Limited access to resources like bandwidth and storage.
- Potential for slower website response during peak traffic times.
- Security risks due to shared resources.
Pros and Cons of Dedicated Hosting
Pros:
- Complete control over server configuration and administration.
- High reliability and performance stability.
- Enhanced security, as resources are not shared with other websites.
Cons:
- Higher cost, making it less affordable for small businesses.
- Requires technical knowledge to manage and maintain.
- Possible underutilization of resources for smaller websites.
Pros and Cons of VPS Hosting
Pros:
- Scalable resources with better security than shared hosting.
- Ability to handle higher traffic compared to shared hosting.
- More affordable than dedicated hosting with many of the same benefits.
Cons:
- More expensive than shared hosting.
- Requires some technical knowledge to fully exploit its capabilities.
- Potential resource limitations due to a shared physical server.
What Type of Hosting Should Your Business Use?
Shared Hosting
Best for small businesses, personal blogs, and low-traffic websites.
Ideal for users with limited technical skills or those who prefer a “set it and forget it” approach.
Small businesses that don’t need more than a simple website are the ideal users of shared hosting.
Businesses that are cost-conscious and don’t see a lot of sales through their website channel.
Dedicated Hosting
- Suitable for large businesses who can afford the higher cost associated with dedicated servers.
- Essential for businesses that acquire a lot of sales through their website and need to make sure it’s always running perfectly.
- Enterprises requiring extensive custom applications and software freedom need dedicated servers to handle the load placed on them by apps and software.
- Tech-specific companies that have a high need for constant, clean data.
- Companies that require high levels of security and encryption should have their own dedicated servers.
VPS Hosting
- Great for medium-sized businesses experiencing growth, that see increasing demand for their product or services online, but cannot afford the high costs of a dedicated server.
- Ideal for websites that need to scale resources quickly based on traffic demands, as a VPS allows for flexibility and scalability without increased cost.
- Cost-conscious businesses that need access to more traffic but need to balance the costs of doing so.
The State of the Web Hosting Market
Market Size and Specific Shares
- Global Web Hosting Market: As of 2023, the global web hosting market was valued at approximately $124.80 billion. By 2030, the global web hosting market is projected to reach around $395.84 billion – demonstrating exactly how important web hosting will continue to be.
Market Share by Hosting Type
- Shared Hosting: This segment is substantial within the industry, with about 90% of websites on shared plans using GoDaddy, indicating a dominant market presence. Shared hosting plans are typically cost-effective, which contributes to their high adoption rate.
- VPS Hosting: VPS hosting is increasingly adopted for its balance of cost, control, and flexibility. Approximately 63% of the websites on VPS plans are hosted by GoDaddy, reflecting its strong market position in this segment as well.
- Dedicated Hosting: Dedicated hosting accounts for 25.5% of the web hosting services market. It’s particularly preferred by large-scale businesses that require extensive server resources and heightened security. GoDaddy leads this segment too, hosting 35% of all sites known to use dedicated hosting.
Regional Market Shares
- North America: In 2023, this region held the largest share of the global web hosting market at 42%, with the United States generating the most revenue at $45.7 billion. This dominance is due to advanced technological infrastructure and a high concentration of major players like Amazon, Google, IBM, and so on.
- Asia Pacific: Projected to grow at the most rapid pace, the market in the Asia Pacific is fueled by increased internet usage and government investments in technology startups. By 2026, the market is expected to reach $2.5 billion in this region.
Key Players and Competitive Landscape
- GoDaddy: As you may have noticed from our earlier dissection of the market, GoDaddy is the king of web hosting at the moment, holding 9.29% of the web hosting market, GoDaddy is the largest web hosting provider globally, indicating its extensive service range and market penetration. It is followed by Google Cloud Platform with 7.03% and Amazon Web Services with 4.48%.
- Amazon Web Services (AWS): AWS is a significant player, especially among high-traffic sites, hosting 12% of the top 1 million websites based on traffic. It is renowned for its scalable and robust cloud hosting services.
- Smaller Hosting Services
- Shared Hosting Providers
- Dedicated Hosting Providers
- InMotion: Known for maximum storage options and robust performance.
- Liquid Web: Known for premium services with high reliability.
- VPS Hosting Providers
- HostGator: Offers excellent scalability options and strong customer support.
- A2 Hosting: Known for fast performance and reliability – they claim they provide 20x faster speeds at 99% uptime!
Recommendations for Businesses
When selecting a web hosting provider, businesses should consider their specific needs such as traffic volume, security requirements, and scalability. When in doubt, start small and add on when needed, so you don’t hamstring your budget with a server solution you don’t need.
For those prioritizing robustness and market presence, GoDaddy offers a wide range of hosting services and is an industry leader, with almost 10% of the total market share. That said, you can’t go wrong with the other industry titans like Google and AWS, whose sterling reputations have definitely been earned.
In conclusion, the choice between shared, VPS, and dedicated hosting should be based on the specific needs of the business, based specifically around website traffic, resource requirements, security concerns, and total budget. Each hosting type offers distinct advantages and limitations – make sure you communicate with your IT team to correctly evaluate your business’ priorities carefully, so you can effectively and efficiently choose the appropriate hosting solution that aligns with your business objectives in both the short and long terms.