Since early to mid 1990s shared and/or affordable hosting has become very popular with individuals and small businesses looking economical and increasingly feature rich Internet solutions.
Nowadays, you can get reliable and affordable hosting plans for as much as what you pay for a coffee at a local Starbucks.

Historical background:

Thanks to the changes that were added to the HTTP/1.1 protocol. HTTP/1.1 protocol now requires that http requests from a client to the server include the domain name. This makes it possible for a single server to serve as many domains as it’s capacity allows.

This change in HTTP protocol allowed the availability and boom of shared hosting.

However this doesn’t come for free. The downside of hosting many client accounts on a single server can incurs more security risks, than with a single dedicated server. One malicious script can allow a hacker to gain access and crash an entire server. Another script can cause the server to run out of memory, and consequently all other customers will be inconvenienced, because their sites can slow down or in worst cases crash.

However these risks are mitigated with monitoring services and backup tools provided by data centers that always monitor any suspicious activity, and recover data when lost in a speedy manner. In addition Terms of Service provided by hosting providers always add provisions that make it clear what their course of action will be for any suspicious activities on their servers.

Let’s take a closer look at the pros and cons. Following comes to mind:

Pros

– Low cost and affordability
This is the #1 reason for it’s popularity, everyone can easily afford a web presence to their liking.
Thanks for all the great tools provided by the open source community that allows endless possibilities of customization and creativity.

– Great back-end server administration tools
Hosting providers offer cPanel and/or cPanel like tools, were clients can perform almost any activity without any technical knowledge.

– Multiple E-mail, sub-domain, and addon domain accounts
With any affordable hosting plan you can get multiple e-mail, databases, sub-domain, and addon domains to you main domain name. Just search and sign up for what you think will fit your web presence need.

– Maintenance, Monitoring, and the like
This is what distinguishes one Web Hosting provider from another. Since every provider offers similar features that usually exceed what you might need, you should always focus your research on reliability, history, and support response quality.

Cons :

– Low security level
Security comes at a cost, since resources are shared on a single server. However taking simple steps on the user side, as well as the hosting provider will eliminate most ( if not all ) security issues that a web site owner could face. ( Check more my other posts about security )

– Reliability
When the server goes down for any reason, so will all of the accounts: e-mail, databases, and web sites on that server. This issue is however minimized when the hosting provider’s data center equipped with monitoring tools, act swiftly to resolve any issue. Again, this is what distinguishes one web hosting provider form another.

Limitations

– Resource limitation
Every client on the server uses the same memory, CPU and disk space. This limitation is however transparent to clients who sign up with reputable hosting providers, who have great system management and monitoring tools and are always on top of any issue that resurfaces.

– Software installation limitation
The only limitation that I know of would be software that uses ports or requires hardware or web server configuration changes. For instance you can’t install a database management system (DBMS ) or a configuration management system (CM).
You can however write or install most business application scripts available. You can also install SSL encryption for credit card and form processing.
Software that you can’t install is very limited, but if that’s what you are looking for, then I would recommend you to look into dedicated server, which on the other hand will require a bigger investment on your part.

In conclusion:

Affordable Hosting plans deliver great for individuals and small business looking for a wide array of web applications. You just have to look for Hosting providers that are equipped with state of the art management and monitoring systems that minimize any downtime and provide restores to any data lost.

Don’t worry about space and bandwidth for now.

As the need of your web site evolve, and you increasingly want more out of it, you will know: It’s time to upgrade.