Multiple sites are hosted in the same server. All the sites share the resources such CPU, RAM.
They are business men. They may not have their own data centers. They purchase disk space, bandwidth, or servers from data centers and resell to customers with their own packages.
More features are provided in the hosting plan such as media streaming, audio streaming ,etc.
There is only one site hosted in one server. Comparing to shared server, all the resources of the server go to one web site and performance is much improved. Of course, the price also increases.
It is meant for you to protect your files or directories with a valid user name and password. For example: you may want to protect /home/user/domain.com/stats folder so that only you can view your site statistics.
Virtual Private Server divides a dedicated server into multiple isolated partitions, evenly sharing server resources among no more than 10 (usually) customers per server. The performance in VPS is much better than in shared servers.
If you have any other questions, DH Wiki may be your best friend.
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