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Shared server web hosting is when a number of websites, usuallly belonging to different customers, are operated from a single web server computer connected to the internet. Each of the websites on the shared server is contained within its own specified private partition or section in the server, and, at least in theory, remains completely separate from the other websites on the server. Shared server hosting is generally the most affordable option for setting up websites, simply because the cost of running and maintaining the server is shared between a number (often a large number) of website owners.
The disadvantage of shared server hosting is that you are of course sharing a computer with others and that are various issues and limitation that can arise from that. Firstly, you don't have an exclusive right to the CPU, disk, or bandwidth - so the web hosting company will probably set restrictions on your usage so as to be fair to their other customers. Secondly, it is possible (although fortunately is generally rare) that another person's site on the same server could cause you problems - if for example, it used more than its fair share of resources, or if caused the server crash, or if it had a security breach, which allowed hackers to access the server.
Another issue to think about with shared hosting is whether your website gets its own IP address, or whether your IP address may be shared with other sites on the same server. For most simple sites, you probably don't need your own IP address (although for some types of search engine optimization, you might think it important), but if you have your own secure payment gateway you may need one. Fortunately, many (but not all) shared hosting services can often you an IP address of your own for a modest at extra cost.
When choosing shared hosting, the obvious think to look at is price and what is included in terms of features (including operating system), disk space, and bandwidth. I would also recommend however that you look at what control panel is offered by the hosting company. There are some standard web-based control panel systems like DirectAdmin, cPanel, H-Sphere etc., and you might consider it an advantage to select a host which offers a control panel that you are familiar with.
To summarize then, when you build your first website, you will almost certainly want to start with shared web hosting - it is the most economic way to get up and running, requires the least technical skill by the website operator, and is what most people. It may well be that shared hosting is all you ever need, but if not, be aware that there are other options such as virtual private server hosting and dedicated server hosting.
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