Dedicated IP vs. Shared IP: Which One Should You Use?

Dedicated IP vs. Shared IP

One of the most important things a business owner can do when setting up their network is ensuring it’s set up with the right IP addresses. This will allow you to utilize your in-house network, and work with other networks to do business.

As you get set up, you may be trying to decide what kind of IP address you need—a dedicated IP address or a shared IP address. The most significant difference is that a dedicated IP address is given exclusively to a single user, while a shared IP address can be used by multiple users at the same time.

In this article, we’ll go over the differences between a dedicated IP address vs a shared IP address, why internet service providers offer either option, and provide answers to help you choose what will be best for yourself and your business.

TL;DR: The Main Differences Between Dedicated IP and Shared IP

Don’t have time to read the full post?

We got you covered. In this section, we’ve outlined the most significant information and differences between dedicated IP and shared IP addresses.

What Is an IP Address?

An IP address, or Internet Protocol address, is a numerical label assigned to each device connected to a computer network that uses the Internet Protocol for communication.

Essentially, it serves as a unique identifier for a device within a network, allowing it to send and receive data across the internet. IP addresses play a fundamental role in the functioning of the internet by enabling the routing of information between different devices. IP addresses consist of a series of four sets of numbers separated by dots (e.g., 

IP addresses are essential for the proper functioning of various internet services and applications, including web browsing, email communication, file transfers, and online gaming. Every device connected to the internet, whether it’s a computer, smartphone, tablet, or server, requires a unique IP address to facilitate the exchange of data. Internet Service Providers (ISPs) assign IP addresses dynamically or statically based on the type of connection.

Dynamic IP addresses change periodically, while static IP addresses remain constant, providing a fixed point of reference for a specific device on the internet. In essence, IP addresses serve as the digital equivalent of a mailing address, enabling seamless communication and data transfer across the global network.

What Is a Dedicated IP Address?

A dedicated IP address is exclusively assigned to a single user or a single hosting account. This means that the user has a unique numerical label that identifies their device or website on the internet and is only for the user to utilize.

Dedicated IPs are often favored by businesses or individuals who require a secure and direct connection for activities such as running an e-commerce site or hosting a private server. One notable advantage of a dedicated IP is that it tends to enhance website performance and security, as there is no risk of being affected by the actions of other users.

What Is a Shared IP Address?

A shared IP address is one that is used by multiple users simultaneously. In a shared IP environment, several websites or users share the same numerical label to access the internet. Shared IPs are a cost-effective solution, as multiple users can benefit from the same IP address, reducing overall expenses. However, shared IPs may pose certain risks, particularly in terms of security. If one user on the shared IP engages in malicious activities or violates terms of service, it can potentially affect the reputation and functionality of other users sharing the same IP address.

Dedicated IP vs Shared IP: In-Depth Comparison

A dedicated IP address and a shared IP address represent two distinct approaches to managing internet protocol resources, each with its advantages and considerations.

A Dedicated IP Address

A dedicated IP address is an exclusive numerical label assigned to a single device or server. This exclusivity provides several benefits, including enhanced control, security, and reliability. Dedicated IPs are commonly employed in scenarios where consistent access and reliability are paramount, such as hosting a website or running critical online applications. One notable advantage is the ability to implement SSL certificates for secure data transmission, crucial for e-commerce sites and other services where encryption is a priority. However, dedicated IPs can be more expensive and may require additional configuration, making them a preferred choice for businesses or individuals with specific performance and security requirements.

A Shared IP Address

On the other hand, a shared IP address is used by multiple users simultaneously. This approach is cost-effective, as multiple users can share the same IP, reducing overall expenses. Shared IPs are often used in standard hosting environments, where cost efficiency and simplicity are priorities. However, one significant drawback is the potential for security risks. If one user on a shared IP engages in malicious activities, it could impact the reputation and functionality of other users sharing the same address. Additionally, shared IPs may face limitations in terms of certain applications, such as setting up SSL certificates, as the security measures (like IP whitelisting, for instance), apply to all users on the shared address.

In conclusion, the choice between a dedicated and shared IP address depends on the specific needs and priorities of the user or business. A dedicated IP offers exclusivity, control, and security but may come with higher costs and maintenance requirements. In contrast, a shared IP is more economical but entails potential security risks and limitations. Balancing these factors is crucial when deciding which type of IP address aligns best with the goals and requirements of a particular online presence or service.

Dedicated IPShared IP
Offers additional securityMore potential security risks
More diverse options to design websitesMay be limited in web design
Better website performanceWeb performance may be limited
More expensiveMore cost effective

What’s Better: Dedicated IP or Shared IP?

So, you’re wondering which is better, a dedicated IP address, or a shared IP address. But what’s best for one business, might not be the best option for another business. Here are some common case uses for both a dedicated IP and a shared IP:

Dedicated IP

Dedicated IP addresses find their niche in applications that demand a heightened level of control, reliability, and cybersecurity. E-commerce websites, for example, often utilize dedicated IPs to establish secure connections for online transactions. The implementation of SSL certificates is more straightforward with dedicated IPs, ensuring the confidentiality and integrity of customer data during financial transactions. Additionally, dedicated IPs are preferred for hosting private servers or running applications that require consistent and direct access, such as VPNs or remote desktop connections. Businesses relying on email marketing campaigns may also benefit from dedicated IPs, as they provide better deliverability rates and help establish a positive sender reputation.

Shared IP

Shared IP addresses, on the other hand, cater to scenarios where cost efficiency and simplicity take precedence over exclusive control. Standard web hosting services commonly use shared IPs, making them suitable for personal blogs, small business websites, and other general online platforms. Content management systems (CMS) like WordPress often thrive in shared hosting environments, where multiple users share the same IP without the need for extensive customization or security measures. Shared IPs are also popular for hosting development and testing environments, as the lower cost allows for a more economical setup when advanced security measures are not a primary concern.

In the realm of e-commerce, the decision between a dedicated and shared IP often boils down to the sensitivity of the transactions and the need for customer trust. While shared IPs may be suitable for smaller online stores, larger e-commerce platforms that process a significant volume of transactions may opt for dedicated IPs to provide an extra layer of security and ensure a seamless shopping experience. Dedicated IPs can enhance the site’s credibility, which is crucial for businesses dealing with sensitive customer information.

In the context of Search Engine Optimization (SEO), the impact of IP address type is a consideration. Search engines like Google may view dedicated IPs as more trustworthy, potentially providing a slight advantage in rankings. However, for many websites, the SEO impact is minimal, and content quality and relevance play more substantial roles. Shared IPs are perfectly adequate for the majority of websites, and the decision between dedicated and shared IP should not solely hinge on SEO considerations unless it aligns with specific business goals.

Get Bulletproof Security with Perimeter81

We’ve learned about the differences between a dedicated IP and a shared IP, and the pros and cons associated with both options. A dedicated IP may work for businesses that want more exclusive control over their website, like an e-commerce platform. A shared IP may work for businesses who want to focus on cost efficiency and simplicity instead of exclusive control.

Whether you’re looking at a dedicated IP or a shared IP, Perimeter81 is your solution partner to make sure that your network and website are secure.

Our team will be here along the way to make sure that your business and online network are provided with the proper tools to protect you from the constant surge of online threats.

Get started with Perimeter81 right now and supercharge your security.


Is it better to have a dedicated IP?
It depends on what your priorities for your IP are. If you are looking for increased performance, added security, and more control, a dedicated IP may fit your needs.
What is dedicated or shared IP VPN?
A dedicated IP VPN provides users with a unique, static IP address that is exclusively assigned to them. This means that whenever a user connects to the VPN, they are allocated the same IP address every time. This type of VPN is often used for specific purposes such as remote access to company networks, online banking, or accessing services that require consistent IP authentication.

In contrast, a shared IP VPN allocates the same IP address to multiple users concurrently. Users share the same pool of IP addresses, and when they connect to the VPN, they may be assigned any available IP from that pool. Shared IP VPNs are commonly used for general internet browsing, anonymous online activities, and situations where the focus is on privacy rather than consistent identification. They are more cost-effective since multiple users share the infrastructure, but they might not be suitable for certain applications that require a dedicated and unchanging IP address.
Does dedicated IP improve speed?
Yes, a dedicated IP often improves site speed because the IP is dedicated to just your website.