Dedicated IP Address vs. Shared IP Address: Differences and Benefits

First things first, what’s an IP address?

IP or Internet Protocol is a protocol or method by which data is sent from one computer to the other on the internet. It is a unique address that identifies a particular device on a local network or the internet.  

In essence, IP addresses contain local information and make the devices accessible for communication, allowing information to be shared between the devices on a network. Also, these addresses provide a way to differentiate between different routers, computers, and websites and form an integral part of how the internet works. 

IP addresses can be broadly classified into two types: dedicated IP addresses and shared IP addresses. We’ll explain both in detail in the succeeding sections. 

READ: What is an IP Address – Meaning and Types

What Is a Dedicated IP Address? 

One dedicated IP address is assigned to only one company, which can be used through a Virtual Private Network (VPN). All the individuals assigned to this specific IP address are granted secure access to company data and safe entry into the network — from anywhere in the world. 

When transmitted through a dedicated IP, all your online traffic will remain unseen and private all the time. Implementing a dedicated IP solution is an effective and simple way to maintain a strong security system, ensuring that all the users on your network are trusted ones. 

Dedicated IPs also enable you to control permissions; thus, preventing unauthorized network access and ensuring the teams can smoothly access business data, regardless of their location. 

What Is a Shared IP Address? 

A shared IP address means that the address assigned to a hosting account or website is shared between multiple domains and websites. It can host many websites on a single web server. Because one IP address is used for multiple sites, the actions of one website owner can affect the IP reputation of all the websites sharing that IP on the server.  

Websites that rely on shared hosting plans share the hosting with websites. This tends to be the case for SMEs or individual websites, where traffic volumes are other easily manageable and the websites themselves are limited in terms of the number of pages, etc.  

Differences between a Dedicated IP vs Shared IP Address 

 Benefits of a Dedicated IP vs. Shared IP Address 

Both dedicated IP addresses and shared IP addresses have their own set of benefits. We’ll take you through them. 

Benefits of Using a Dedicated IP Address 

Reduces the Risk of IP Blacklisting 

While sharing an IP address is usually safe, it risks your website’s country-specific blocking. Another website that is sharing the server may perform illegal activities like sending out viruses, malware, or spam emails and get you blocked by search engines.  

With a dedicated IP, there’s zero possibility of your IP getting blocked unless you get involved in doing something malicious.  

Secure Remote Access 

Remote work has prompted an increase in security risks. 

Dedicated servers with fixed IPs allow for efficient and safe access to the company’s resources. Companies do not have to worry about security breaches. Even if they encounter any, they can immediately identify the problem account it came from as every employee is assigned a unique, respective IP address. 

Enhanced Reputation Control 

With a dedicated IP, you have control over your IP reputation. You do not have to really worry about the domains damaging your IP reputation, your emails landing in the spam folder, or sharing an IP address with websites having adult content. 

Safer and Quicker File Transfer 

With a dedicated server, you can build your FTP (File Transfer Protocol) server to share files within your organization. It will offer a faster file transfer rate and better protection. 

Benefits of Using a Shared IP Address 

Cost-Effective Price Point 

A shared IP is a more affordable option as compared to a dedicated IP. It is inexpensive, particularly when bundled with web hosting as the user will share the server costs with various other users. For small businesses or startups who are just taking the leap into the market, shared IPs are a better option from a financial point of view.  

Ensures a Better Sender Reputation 

All the senders put in efforts to maintain a good sender reputation. The responsibility is not completely on you. An occasional mistake may not have a major impact on the sender’s reputation as multiple senders are sharing the reputed shared IP. 

Enhanced Reputation for New Domains 

When IP addresses are shared by multiple domains, the IP health is monitored by all the domains instead of any single domain. Meaning, new businesses can benefit from the good reputation of well-established domains by using the same IP address, reducing the effort to build a good reputation.  

READ: IPv4 vs IPv6 — Differences Between the Two Protocols

How Can the Type of Your IP Address Impact Your Website? 

Here is a breakdown of how using a shared or dedicated IP address can impact your website: 

Speed and Performance 

A shared IP address does not necessarily slow down a website’s speed or impact a website’s performance. Instead, your website speed and performance depend on various other factors like your web hosting service.  

For example, you may notice a decreased performance of your website (in situations like high traffic) in shared hosting regardless of the IP address type you use. This is because you are sharing server resources with many other websites.  

Security 

Earlier, a dedicated IP address used to be a necessary requirement if you wanted to add an SSL certificate to your website, but today it is no longer the case. You can easily encrypt your website with an SSL certificate even if you are using a shared IP address. The security of your website depends on your chosen type of web hosting. In most cases, dedicated hosting may provide more security for your website as compared to shared hosting. 

SEO 

Ideally, your IP address type doesn’t have any impact on your website’s SEO. Focus on key factors like page speed or content to improve your website’s SEO. 

Mail Deliverability 

IP addresses with a good reputation have better delivery rates and rarely go to the spam folder. Thereby, a dedicated IP address can positively impact your mail deliverability. Sometimes, it is easier to manage the reputation of your IP when it does not depend on other domains’ activity. 

However, it is important to keep in mind that dedicated IP addresses that are specifically used to send emails prove to be a good choice only if you’re a big-volume email sender. Unless you’re sending out 100,000+ emails per month, it doesn’t make sense to use a dedicated IP address. 

Pricing 

A web hosting provider usually assigns a shared IP address without charging any additional fees. However, for a dedicated IP address, you need to pay an additional cost. The cost would depend on your hosting provider.  

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Whether you are using a shared or dedicated IP address, it has virtually no large impact on your website. It does not truly impact your performance, SEO, or security (there are always rare exceptions though).  

So why should one care about IP addresses? As we mentioned previously, it is a way to identify your website. And the most important thing to remember here is — if you have safe website practices in place, like using a reliable WordPress hosting provider and installing an SSL certificate, your IP address is not something you need to worry about.  

READ: How to Install an SSL Certificate in Just a Few Clicks 

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