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The following discussion is in the context of web server hosting. A web server or the HTTP server serves up the web pages to a visitor to your site. The term visitor is actually a misnomer. A person who wants to look at a specific page of your website sends a request through his browser on his machine for this page. Your web server sends a file containing the page back to the requesting browser. The file content also contains content formatting information so that your browser can display the information on your screen properly. The request-response protocol is based on the HTTP, or the hyper text transfer protocol. The application running on a server that handles these requests is known as the HTTP server, or more commonly the web server. The web server obviously needs to be housed somewhere that can handle a large load of communications assuming a lot of page requests would be coming at your web server at any given time from the Internet. Going with a service provider is the most economical option.
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Types of Hosting
Service providers then provide you with the major resources required for hosting. Machine resources and communication resources are the major items. They take care of the related maintenance and other management issues. With a large number of machines that they operate, they use server virtualization to increase the utilization. Each physical machine actually runs multiple machine environments. For example your web server, its operating system, databases, and the file system would run as a virtual machine along with couple or more other such virtual machines. All the resources, CPU, RAM, disk space etc are shared between these virtual machines inside the server.
They are fully managed by the service provider and the only access to the web site that you hosted with the provider is the facility to upload new or modified pages for your site. The service provider will arrange to send you the data collected by you on your site, of course. This access will be through some control panel like Cpanel or the Plesk. The other end of the spectrum is a complete machine/server dedicated to you. The machine is owned by the provider, but he rents you the complete control of it. Some service providers may even provide you just the rack space for your very own server – the so called co-located server! Most people, who need more control over their servers, than what shared service provide, can use virtual private server(VPS) or virtual dedicated servers (VDS) from providers.
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VIrtual Private Servers
Virtual private servers are truly the middle of the road. A server holding multiple private servers is still shared. But each virtual machine has defined, guaranteed resources and their operating environments are isolated from one another. Therefore, even though multiple servers share a physical server, for most intent and purposes they are individual servers to the user. Each of these virtual servers can run its own OS and applications and be rebooted individually. Users are provided the so called root access or complete administrative control. You are then able to do whatever you can do with a dedicated machine. You can have your own users set up, processes, applications and your very own file system. You are able to fully customize your server and choose the specific applications needed. Yet the physical upkeep such as maintenance, back up, etc. can remain with the service provider. It's more secure, too, as one infected server cannot affect another as with shared servers.
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Some Typical Specs & Prices
Most common specifications for servers across the board are the disk space and the bandwidth. Charges for bandwidth usage beyond a limit is common although some service providers provide unlimited bandwidth too. Uptime guarantees are common in service level agreements (SLA). Look for numbers better than 95%. Some providers will also tell you about how many firewall rules you can set up.
What's critical for VPS are the server resources guarantees. 512 MB to 1 GB RAM memory is quite standard across providers. This is the maximum memory you should plan on using. But then there is a "burstable" spec, too. This is a maximum amount of RAM that can be used in short bursts.
Shared hosting is the cheapest available. Prices start at $3 to $5 per month range. VPS services are more expensive and are available at around $50 to $100 per month. Truly dedicated servers will cost you much more. Therefore, if you are looking for cost effective, yet highly controllable, hosting solutions then VPS/VDS is the way to go.
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Is it the Solution for You?
VPS costs are quite affordable. If full customization of your web server, choice of software applications, etc. are important to you then VPS is the way to go. If you have the people to do that as well as manage web site administration, then this is what you'll need to adopt.