The term hosting is generically used to describe a variety of services necessary to support a web site. Confusion often arises from use of this generic term since hosting is an often complex and multi-faceted issue.

In the most general sense, a web site requires (1) hardware, (2)software, (3) a connection to the Internet and (4) an administrator. 

1. Administrator The Administrator performs the following duties: - Configure Server / Install Software - Monitor Server  - Run Traffic Reports - Run Backups  - Monitor site responsiveness - Manage disk storage space - Security monitoring and management - Administer Databases	2. Software Software could consist of an: - Operating System  (i.e., Windows NT, Linux) Required: - Web Server (i.e., Apache) Required - Traffic Reporting (i.e., Web Trends ) - Credit Card Software - Databases - Digital Encryption (i.e., VeriSign)
3. Hardware - Server - Network devices (switches, routers, wiring) - Tape backup - Secure physical racks or lockers - Storage Area Network (SAN) - Optional - Premise security - Optional - Network Firewall - Optional - Load balancing - Optional - Fire control systems - Optional - Uninterruptible Power Supply - Optional	4. Connectivity  Connectivity is the manner in which the ISP or MSP provides Internet access to the website. At a minimum this should be a Frame Relay or T1 connection. Better providers will provide redundant connections to diverse upstream Internet providers.

Levels of Service
Hosting services can be divided into four different categories, with each providing a different set of administrative, hardware, software, and connectivity services. Generally, as the level of service increases, the costs increase. The four categories are:
Shared
Co-location 
Managed
Development 

Shared Hosting 
An Internet Service Provider (ISP) manages the Internet connection, hardware and software for a web site. Shared Hosting environments put multiple web sites on one server. All of the web sites on the shared server use the same network connection, the same hardware resources, and the same software. This is an acceptable solution for a basic or passive web site that does not have high bandwidth requirements, special hardware requirements, dynamic content generation and is able to conform to the operating system/web server setup used by that ISP. 

The major risk of shared servers is security. If more than one web site is allowed to execute or modify programs on a particular computer, the integrity of all the programs on that server are compromised. Essentially, multiple large web sites on one server cannot guarantee that their data is secure. This is a particular concern to large web sites that process and store credit card numbers. If a machine is shared by a group of web sites the integrity of any information (including a database of credit card numbers) on the server cannot be ensured.

Another issue with a shared server is performance. An organization cannot know what other promotions, features, applications, etc. are running on a shared server. If another web site on the shared server is using most of the bandwidth, then all other web sites on the shared server suffer the performance hit. Bandwidth, CPU usage, user volume are all out of an organizations' control when a shared server solution is implemented.

Co-location Hosting 
An ISP or MSP provides a network connection and a physical space to put a server. Co-location hosting service is essentially access to a steel server locker and a high-speed, guaranteed bandwidth, local area network connection. The ISP maintains the network connection, security and power management for the locker and building, but they do not provide the hardware or software. The site owner must supply the personnel to manage the web site software. 

This hosting solution addresses the security and performance concerns of shared hosting. It is a popular choice for technology companies with the resources and sophisticated needs to keep a very high level of control. 

Managed Hosting
Managed Hosting is a step up from co-location. At this level of service the ISP or MSP will acquire the hardware and software needed for a site as well as provide administration services. Managed hosting can include performance and security testing, monitoring, reporting and networking services. Managed hosts provide a high level of customer service and feedback. 

However, Managed Hosting only provides support for the hardware and OS. Managed Hosting does not support the individual application levels.

For companies with sites that are mission critical but do not have extensive technology resources such as personnel and knowledge, this is a common choice. Personnel are always on hand to trouble shoot and keep the site functioning.

Development Hosting
As web services become more complex and interactive, Development Hosting is gaining in popularity. It brings all of the value of Managed Hosting while adding full application support. The line between development and hosting becomes blurred, as more applications are written that need specialized environments and as companies deliver a wider variety of services that use complex multi-system interactions. Developers will offer high-end hosting as part of the complete project. Fully scalable networks, scalable application management, clustered server applications, and extensible hardware setups qualify as Development Hosting