Each machine connected to the Internet is assigned an Internet Protocol (IP) address. This is a long string of numbers that tells switches to whom and from where information is destined. In this way, it is much like a telephone number. Everyday web users, however, are not often exposed to IP addresses. This is because they are difficult to remember, thus we use domain names (i.e. anonymouswebhosting.org or google.com) as easy to remember shortcuts (kind of like speed dial).

Another issue is that some websites share an IP address. For example, anonymouswebhosting.org and flipcamcorder.ca both have the same IP address: 76.12.17.218—that’s because they share a website server. This is what’s called a shared IP address.

Meanwhile, other websites have their very own IP address. For example, Google.com’s IP address is 72.14.221.104 and there are no other sites that have this IP address. This is called a dedicated IP address.

Choosing a website server with a shared IP address over a dedicated IP address has its pros and cons, as does opting for a dedicated IP address instead. Which type of IP address is best for you depends largely on how your website functions and what features are important to you.

Shared IP Address Pros and Cons

The main benefit of a shared IP address is cost. Shared IP addresses come with shared hosting packages, in which your website is located on the same website server as several other websites. Because of this, you will pay a fraction of the cost as someone on their own server.

The drawbacks of a shared IP address is that you cannot get your own SSL certificate. SSL certificates require a dedicated IP address. Thus, in order to make secure transactions, you will have to refer customers offsite, to a processor such as PayPal or Google Checkout.

Furthermore, there is some fear in the search engine optimization (SEO) community that shared IP addresses pose a liability. For example, if you share an IP address with a known spammer, search engines may penalize all websites with that IP address. Furthermore, email servers may block all emails from your IP addresses (blacklisted).

Dedicated IP Address Pros and Cons

The benefits and drawbacks of a dedicated IP address are the opposite of a shared IP address. Because you’ll have to have a virtual private server (VPS) or dedicated website server in order to get your own dedicated IP address, you will have to pay significantly more. But the benefits in terms of security, encryption and verification are a must-have for any major retailer, online store or ecommerce operation.

In general, larger companies that can afford the extra costs and stores that regularly accept credit cards and process payments will want to opt for a dedicated IP address. The ability to obtain an SSL certificate is a standard expectation for online business. Without it, you risk losing your customer’s trust.
Summary

In conclusion, a shared IP address is sufficient for most personal and business websites where personal data isn’t being transferred. There is the risk of a “guilt by association” situation, but most website server hosting companies are fairly strict and proactive about ceasing unscrupulous behavior originating from their IP addresses. For large, commercial websites who accept credit card information and other sensitive data, a dedicated IP address is vital.