Virtual hosting is one of the most popular web hosting options available today, mostly because it is so cost effective. This method involves a web server hosting multiple domains on the same computer, often on the same IP address.
Virtual hosting is also known as “shared web hosting” because it allows a web master to host a site on a server shared with other websites. The site's server will distribute bandwidth and hosting services to the multiple websites, each of them sharing the cost amongst the group. Sharing the cost keeps the cost down as opposed to websites hosted on dedicated servers in which the cost is shouldered solely by the webmaster.
This seems to be the best option for small to medium-sized websites without substantial bandwidth. The low amount of traffic is an appropriate size for a shared server, while the cost is low making hosting the site profitable/affordable. The needs of most of these sites can be met with 10 to 100 MB of disk space and 1-10 GB of data transfer per month. Images and video are especially large and can eat up space, so if your site is going to have a lot of that, shooting for something bigger would be a good idea. However text-based sites take up almost no space.
Name-Based Virtual Hosting vs. IP-Based Virtual Hosting
There are two avenues to explore when considering virtual hosting: name-based and IP address or ip-based. Name-based virtual hosts utilize multiple host names for the same webserver IP address. However certain clients, usually the older ones, may not be compatible with name-based virtual hosting. Also, some operating systems use bandwidth management techniques that may not be able to decipher one host from another unless they are on seperate IP adresses.
When using an IP-based virtual host, each site points to a unique IP address that determines the correct virtual host to serve. This option can be more expensive as a seperate IP address is necessary for each host. The cost does come with its advantages though as IP-based virtual hosting delivers universal compatibility.