Webmasters often confuse deciding whether to use dedicated IP or shared IP. The purpose of using dedicated IP is actually based on the website requirements of two things:
1. SSL (Secure Socket Layer)
Websites that use SSL are those that need secure / encrypted data transfer between web server and visitorâ€™s browser, such as e-commerce websites, corporate portals that contain confidential information, corporate webmail, etc.
With SSL, information transferred from web server to visitorâ€™s browser will always be encrypted. Data encryptions are used to scramble the information that is being transferred so that any attempt to steal the information, while itâ€™s still on its way, will be useless as the data they captured have been encrypted and can only be decrypted by the legitimate visitorâ€™s browser.
However, in order to install a SSL certificate onto a website or domain, the domain must be configured with a dedicated IP.
2. Anonymous FTP
Websites that offer file download sometimes want to have anonymous FTP enabled. Anonymous FTP is used to let visitors download files from web server through FTP without having to provide user name & password. In order to enable the anonymous FTP, the domain must be configured with a dedicated IP.
So, based on the two requirements explained above, you can now easily decide whether using dedicated IP or shared IP.
Itâ€™s better to take the decision since the very first time, as changing from shared IP to dedicated IP or vice versa will cause the website to be inaccessible during DNS propagation which can take from 24 hours up to 72 hours.