Skip to main content

Dedicated IP or Shared IP: Which Is Better for Your Business

Read about what an IP address is, which type is best for you, and how to get one for your website.

In IP address, IP stands for internet protocol. It’s assigned to you by your internet service provider, or ISP. An IP address consists of a bunch of numbers that identify the internet connection you’re using.

There’s a lot to know about IP addresses, but here we will limit the discussion to dedicated IPs, shared IPs, website hosting, and VPNs (virtual private networks).

How do IP addresses work?

If you use your computer on your home internet, and then you go to a friend’s house and connect your computer to their Wi-Fi, your IP address will change. That’s because IP addresses change according to the location of each internet network.

Just like your home address is what's used to send mail, IP addresses identify your virtual location to display specific information from the internet.

Types of IP addresses

IP addresses fall into 2 main categories: consumer IPs and website IPs. Depending on whether the IP address has a fixed location or not, it will have a dynamic IP address or a static IP address.

Consumer IP addresses

The 2 types of consumer IP addresses are public and private, which work together to display information to the user. To be clear, consumer IP addresses are not assigned to all devices; they are only assigned to devices that are connected to the internet.

Private IP and public IP

If you have a collection of devices that use the internet—such as your phone, computer, smart home system, or smart television—you are using a private IP to identify and connect each device to the same network, or IP address. Once all devices are connected to the same IP address, they will also connect to each other, allowing you to share information between devices.

A private IP address has to connect to a router and modem in order to access the internet. Once your devices connect to the internet, that private IP is now connected to a public IP, which identifies your network location outside of your home.

Website IP addresses

Just like consumer IPs are used to identify devices that are connected to the internet, website IPs are used to identify websites on the internet. Website IPs are either dedicated or shared, depending on the number of users assigned to the same IP address.

Also, since websites are accessible to the public—regardless of requiring a login or membership—both the shared and dedicated IP are considered public IPs.

Dedicated IP and shared IP

Having a dedicated IP address means you have one domain or website that is hosted by a unique IP address. Alternatively, a shared IP address will host multiple domains and multiple websites.

Imagine if these two kinds of website IPs manifested as brick-and-mortar stores. A dedicated IP address would be like if you bought out an entire street to set up your store. Since you own the block, only you will have control over the flow of foot traffic around your store, enabling people to find you quite easily.

A shared IP address would be like if you had one store inside a shopping mall. You may still have your own store, but it’s in a shared space with other businesses, making it harder for people to find your store.

Dynamic and static IP addresses

The main difference between dynamic and static IP addresses is that dynamic IPs change while static IPs do not.

A dynamic IP address is only active for a certain period of time. It randomly and automatically changes to a new IP address each time you reconnect a device to your network. Most consumer IPs have dynamic IPs because they are free and make it hard for hackers to access your home network.

A static IP address is manually assigned by your ISP and it won’t change unless you request a new one. In general, a public IP will be a static IP.

The relationship between an IP address, a web host, and a web server

Now that we’ve covered what an IP address is and the different types, let’s go over how users interact with your website as well as the relationship between your website and your website IP.

What is website hosting?

To run your website on the internet, you will need to work with a web hosting provider. Web hosting providers give you space on their own server to host your shared or dedicated IP while also providing maintenance, software updates, and some security features.

Let’s break it down a bit more:

  • Website hosting: A service that connects your website to a web server, which is a physical machine that connects to the internet. The website host does not provide an internet connection but rather a location for your website to exist.
  • Website IP address: The network connection between your website and the internet. Your ISP provides your website with an IP address so other users can access your website from the internet.

If we use our brick-and-mortar store analogy again, the website host would be like the landlord of your store. Regardless if you choose to set up shop in a mall (shared IP) or purchase an entire street for your store (dedicated IP), you will need to go to a landlord (website host) to lease out a space for your business.

Types of website hosting

A dedicated IP address uses dedicated hosting, meaning that if you have a website with a dedicated IP, you will have a designated spot on your web host’s server that’s just for you.

Similarly, a shared IP address uses shared hosting, meaning that if you have a website with a shared IP, you are sharing your web host’s server with other website IPs.

Some hosting providers also offer virtual private server hosting, or VPS hosting. It includes a virtual machine to create its own digital environment while living on a physical server. VPS hosting can provide dedicated IP users with a bit more in terms of privacy, resources, and customization.

Web hosting versus web servers

It’s important to note the difference between website hosting (dedicated IP hosting and shared IP hosting) and how web hosts interact with servers:

  • Shared IP hosting: When one website shares an IP address with other websites on a shared server.
  • Shared server: When multiple IPs (dedicated or shared) live on the same server configuration.
  • Dedicated IP hosting: When a website has its own IP address and a private spot on a shared server.
  • Dedicated server: When only one website has its own IP address on its own personal server.

Basically, a shared or dedicated IP address will live on the same server. However, only dedicated IPs have the option to live on a dedicated server.

If you’re a small-to-medium-sized business, you very likely won’t need a dedicated server because of the amount of web traffic you’re getting. Instead, massive, multimillion-dollar companies with millions of users and their own dedicated IPs are much more likely to have a dedicated server.

So if a web hosting provider offers to sell you a package with a dedicated IP address and dedicated server at an extra cost, you likely won’t need it.

How people find your website

When a user wants to find your website, they won’t immediately know your IP address—no matter if you have a shared or dedicated IP. Besides, it would be difficult to search for all websites with just a string of numbers.

Instead, the internet and all other internet protocol networks use a domain name system (DNS). Here’s how it works:

  1. You create a website with a web hosting account and give your website a domain name.
  2. The DNS records your website’s domain name, and your ISP assigns you a shared IP for your website.
  3. When someone types your website’s URL into their browser’s address bar, the DNS translates your user-friendly domain name to your website’s IP, locates your IP address, then connects the user to your website.

What kind of IP address should my website have?

If you own a small or medium-sized business, you will have a public IP—specifically a public static IP address that is hosted on a shared server. However, the choice is yours on whether you want to have a shared or dedicated IP address.

Web hosting providers like GoDaddy, AWS, or WordPress will start you off with a shared IP address that you may choose to upgrade to a dedicated IP address. There are benefits and challenges with both website IP types, but determining the right one depends on your business needs.

No matter which IP address you choose, make sure you consider the following factors before making your decision:

  • The size of your business and the number of employees (especially remote employees)
  • Whether or not you will be handling customer data
  • If you plan on sending marketing emails
  • How much internet traffic you expect your website to get
  • How big your budget is for monthly website maintenance

Benefits of dedicated IP addresses and shared IP addresses

Dedicated IP benefits

A dedicated IP is a single IP address that can connect users directly to your website or online services. Generally, businesses can get a lot of flexibility out of having a dedicated IP address.

First, a dedicated IP address can authorize easy remote access to your website, which can let employees edit, add, or view files without restrictions from the website host. If anything, a dedicated IP will enable website owners to allow or restrict access from other IPs, ensuring that employee IPs won’t get blocked accidentally.

Dedicated IP addresses can help your website run faster, meaning you don’t have to worry about heavy internet traffic slowing down your overall website speed. Other websites also won’t affect the performance of your website, thus users will have direct, smooth access to your website or online services.

Having a dedicated IP can also allow you to add a secure sockets layer, or SSL certificate, to your website. This digital certificate authenticates your website and encrypts data that’s shared between the user and your web host’s server. It essentially enables secure access for anyone who visits your website and prevents data theft by making sure the user’s information is safe, which can be vital for online payments.

Lastly, dedicated IP addresses can improve email delivery, which can be incredibly helpful for businesses that send marketing emails. With a dedicated IP, your recipients are more likely to see your emails in their inboxes because email services like Gmail trust emails from dedicated IP addresses. In general, as email services sift through spam or phishing emails, they are less likely to block or flag emails that come from a dedicated IP address.

Shared IP benefits

As we’ve said before, shared IPs come with a website IP when you first set up your website with a hosting provider. Overall, a shared IP is quick to set up and doesn’t require an additional monthly fee.

While there are not many more advantages to having a shared IP address, the biggest benefit is that shared IPs can be great for small businesses or individual business owners who don’t expect a ton of internet traffic.

For example, a shared IP may be ideal if you have a personal business website that displays previous work, credentials, or even a series of blogs. If you’re just starting out your business and you plan to set up an online store, a shared IP address can help you save on monthly website costs. You can upgrade to a dedicated IP if you start to notice an increase in traffic and you need to boost your website speed.

Challenges of dedicated IP addresses and shared IP addresses

Dedicated IP cons

The one major challenge with a dedicated IP address is how much it may cost you, and those costs vary depending on your hosting provider. Having a dedicated IP can be as cheap as a few dollars a month to as expensive as a couple hundred dollars a month.

Another consideration with a dedicated IP is that you don’t always need one to set up an SSL certificate. However, some hosting providers require having a dedicated IP for SSL installation.

Shared IP cons

Shared IP addresses do come with a few downsides, and there is one major pitfall that tends to turn business owners away from having a shared IP.

First, a shared IP won’t be as fast as a dedicated IP. This can make it difficult for anyone who wants to have quick, smooth access to your website. Also, employees may become frustrated if they can’t make quick updates or gain fast, remote access to your hosting account from a web browser.

Second, you can’t add an SSL certificate with a shared IP address, which means you can’t always guarantee secure access to your website. Since SSL isn’t an option with a shared IP, you will need to invest in another form of cybersecurity.

Finally, the most important obstacle to know about shared IPs is how other websites can affect your own.

While a shared IP address is mostly safe, other users may block your website IP if anyone with the same IP address shows any sort of malicious activity. Some shared hosting providers will also block people from accessing your website if they suspect that your shared IP is engaging in suspicious activity. This could happen if anyone else on your IP does something malicious like send spam emails or make security threats.

Now, you could be the least threatening person on the internet who has no intention to do anything malicious—so why should your website get punished if other people on the same IP do something bad? Unfortunately, this is just how shared IPs work and it’s the reason why many businesses tend to favor dedicated IPs instead.

Do I need a VPN service to have a shared or dedicated IP?

People tend to assume that in order to have a shared or dedicated IP, they will need a VPN as well. Several VPN service providers will even offer a dedicated IP address along with their services, promising that the two together can make you invincible to cyberattacks.

However, this isn’t necessarily true. Furthermore, you actually don’t need a VPN to have a dedicated IP address or even a shared IP address.

Let’s go over what a VPN can and can’t do as well as whether or not you need one.

What VPNs can do

A VPN is a service that protects your internet connection when you and other users interact with your website. It keeps your IP address hidden from the public, including hackers, by encrypting the data between the user and the VPN server. Also, by hiding your IP address, you can trick other websites and services into thinking that you’re in another location.

VPN services can work for either a shared or dedicated IP because VPNs will usually have shared hosting on the same server.

At an extra cost, VPN services can offer a “dedicated IP VPN” where you can have exclusive access to your own server. However, keep in mind that you would be paying for a dedicated IP address, a VPN, and a dedicated IP VPN—combined, this can add up to a lot of money. Just as you may not need dedicated hosting with a dedicated server if you’re a small-to-medium-sized business, you may not need a dedicated IP VPN either.

What VPNs can’t do

While VPNs can certainly encrypt your IP address, they cannot guarantee to protect you, your web host provider, or your users from hackers, phishing attacks, or any hardware-based malware. A VPN can encrypt your data, but that still means hackers can see that the data is there.

Imagine that you set out two plates of cookies on a park bench and cover one of them with an opaque bowl. From afar, you watch someone walk by, see the open plate of cookies, and take one. To that person, the uncovered cookies are easily accessible, but that doesn’t mean that the other plate of cookies is completely invisible; it’s just covered by a bowl.

This is a basic way of explaining how VPNs work. They can hide data, but they can’t make it disappear. If a hacker is smart enough or determined enough, they will likely find a way to access your data—or worse, your customers’ data.

VPN consensus: Do I need one?

If you’re looking to boost your online privacy, encrypt your data, and hide your IP address, a VPN will probably be a worthwhile investment. If you just want a dedicated IP address, or you’re looking for ways to improve your speed and website performance, a VPN isn’t necessary.

However, if you’re looking to keep yourself and your users safe from cyberattacks, you should probably invest in a VPN as well as other cybersecurity measures for your shared or dedicated IP address.

This is especially important to consider if you are actively working with customer data. You should absolutely invest in a VPN service if you’re taking online payments, recording customer information, or engaging in any online activity that involves your customers’ identity.

No matter if you have a shared or dedicated IP address, you should do your best as a business owner to keep your customers’ information hidden. But again, this includes having a VPN as well as other ways to ensure security online.

How to get a shared or dedicated IP address

First, if you have a live website right now, then congrats! You have a shared IP. Since your website has a live domain that other people can find on the internet, then you automatically have a shared IP address. If you want to keep it, then there’s nothing more you need to do!

Now, if you are already hosting a live website but you want to upgrade to have a dedicated IP address, you have two options. You can ask your internet service provider to set one up on their end or ask your web host provider to add one to your hosting account. Either way, it will cost extra.

Some internet service providers offer dedicated IPs, but not all of them. So, it’s good to have the option to ask the shared hosting company your website runs on about setting up a dedicated IP address.

Lastly, if you find yourself having more questions, internet service providers and hosting providers will have a customer service rep who should be able to help.

Consensus: Dedicated IP address or shared IP address

There are great benefits that can come with both a dedicated IP address and shared IP address.

Dedicated IP addresses can improve your website’s performance, accessibility for employees, and your business’s email delivery success rates. Shared IP addresses can help you save on monthly website costs and can work seamlessly for individual entrepreneurs or small businesses.

Whichever one you choose, evaluate your business needs and talk to your providers about your options. Then you’ll be able to make an informed decision on what is best for you and your business.

Share This Article