As a business owner, you need an internet presence. After choosing and registering a domain name, your next step is to decide on a web host. A lot of options are open to you, but first you need to make a decision: shared hosting, or dedicated server?

Shared hosting is the usual choice because of its lower cost. For as little as five dollars a month, a provider can set you up a new account on an existing server in just a few minutes.

However, there are limits to what you can do. Since you are sharing this server with many other customers, their bandwidth use affects you, and yours affects them. The same goes for processor time; one web site with resource-heavy database queries can bring everyone on that server to a stand-still. Your file storage limits will be relatively low, and you'll have little opportunity for customized software installations.

But many small businesses never feel that pinch. Their hosting needs are simple and few. Quite a lot can be done with standard scripting and database options and monthly allotments of 1Gb file storage and 45Gb bandwidth. If all you want is a brochure-style web site and a customer-only message board, there's a shared hosting package out there that'll get you up and running.

How do you know if your hosting needs could be better met with a dedicated server? First, consider bandwidth. When someone views one of your web pages, their browser uploads a request to the server hosting that page, then downloads that page as a file or series of files. Your bandwidth is the total amount, in bytes, of such uploads and downloads in a given month. How big of an audience do you expect at your web site, and what will they be doing there? What kind of information are you serving? If you think you'll be serving more than 1Gb per day, you should look for a dedicated server.

Next, think about your web space needs. Usually these go hand in hand with bandwidth needs; if your visitors can download it, your web server is storing it. Of course, downloads happen repeatedly, while storage only happens once. So the file storage threshold is going to be much lower--say, 500Mb to 1Gb before you'll need to consider a dedicated server.

Other considerations include whether you'll want to develop a network of sites with different domain names, whether you'll need custom COM objects and other software installed, and whether you can risk your site being temporarily shut down if a shared hosting neighbor's insecure script gets hacked. Sharing a server puts more of your environment outside your immediate control.

And, of course, there's price. Dedicated server rental can cost many times more than shared hosting. You may need to postpone your plans for a complex network of heavily interactive sites until such time as your company budget can finance your excursion into the possibilities offered by dedicated servers.