Every machine on the Internet, including the server that hosts your website, has a unique Internet Protocol (IP) address. This address is what lets one computer send information to another. But, because there are so many websites and a finite number of possible IP addresses, it’s become common practice for many sites to share a single IP address.
How it Works
Back in the Dark Ages of the Internet, when the system for creating and assigning IP addresses was born, no one knew that the 4 billion possible IP addresses wouldn’t be enough. We haven’t run out yet, but the growing concern about availability gave birth to the idea of shared IP addresses.
Shared IPs are a bit like general delivery for snail mail. Everything is delivered to one place. But, unlike the post office’s general delivery, the data packets that arrive at the server are sorted again, using additional information, and sent on to their final destination.
The process is seamless to the Internet surfer. For them, whether you’re using a dedicated IP (unique to only your domain) or you’re using a shared IP, makes no difference. There’s no lag in performance or anything else that would negatively affect the user experience.
Benefits of Shared IPs
Having lots of sites share a single IP address makes it easier for the hosting company to manage and maintain each server. And, that results in a cost savings that’s passed along to customers. Shared IP addresses are generally a few dollars cheaper per month than a dedicated IP. For a small business, every dollar counts and for most websites, a shared IP is perfectly adequate.
Drawbacks of Shared IPs
Some people believe that shared IP addresses leave you vulnerable to “guilt by association”. If one of the other sites you share an IP address with is blacklisted for spamming, for instance, or link-farming, will you also be penalized? Google has assured users that they won’t be. And, there’s no PageRank penalty either. Google engineer Matt Cutts put the SEO myth to rest in 2006.
But, there is one major drawback to shared IPs. If you plan on using your site for ecommerce or need to receive any sensitive information from your customers, you’ll need to secure it. Sites are secured by using an SSL (Secure Sockets Layer) certificate. SSL Certificates enable encryption of sensitive data. Private SSL certificates can only be used with dedicated IP addresses.
If you plan on accepting credit cards or using your site for ecommerce in any way, a shared IP address can be problematic. Some Web hosts will sell you a shared SSL certificate, but many users are skeptical of them. The business name associated with the certificate won’t be yours and many customers feel uncertain and just hit the back button.
If you’re planning on creating a basic website, a shared IP address will suit your needs. But, if you’re looking to take your business into the ecommerce world, a dedicated IP is well worth the cost.