Dedicated IP vs shared IP: which one to use?

Dedicated IP vs Shared IP cover

When it comes to IT infrastructure management, one of the main questions that need to be addressed is whether to use a dedicated IP or a shared IP. Both options have pros and cons, and the choice will depend on specific needs and priorities.

In this blog post, we'll explore the differences between dedicated and shared internet protocol types, and factors you should consider when deciding which one to use. This will allow you to understand both options better and make an informed decision best suited to your business case.

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What is an IP?

Internet Protocol (or IP) is a set of rules governing how data is sent over the internet. This allows different devices to communicate with each other using a shared system. Users interact not with IP addresses directly but via domain names. It’s the DNS resolver that retrieves unique IP identifiers.

Every internet-connected device has a unique IP address allowing the data to be sent to and from it. Data packets are routed using a combination of the source and destination IP addresses.

What also should be mentioned there is that there are two versions of IP addresses: IPv4 and IPv6. IPv4 is the older of the two and uses a 32-bit address format, allowing for a maximum of 4.3 billion unique addresses. IPv6, on the other hand, uses a 128-bit address format, allowing for a vastly larger number of unique addresses. This is a future-proofing measure allowing more combinations to be used.

What is a shared IP?

A shared IP or dynamic IP refers to an IP address that multiple users use. In the context of external IP addresses, multiple users on a single network use a shared IP address to connect to the internet. This IP address is assigned by an internet service provider (ISP) and is shared by all the devices connected to that network.

An ISP oversees the rotation of shared IP addresses and rotates them among its user base. IP addresses are assigned on a need basis, and no user has a single ownership of it. This helps to drive IP address maintenance costs down and maximize their usage on the ISPs' part.

How does a shared IP work?

A shared IP address works like any other IP address — it enables data exchange between two destinations. As shared IP addresses are rotated among a large pool of users, external websites cannot distinguish between the devices or users accessing them through the shared IP address pool.

This can cause some issues, such as:

  • Difficulty in identifying a specific device: When multiple devices share the same IP address, it becomes difficult to identify a specific device causing problems or engaging in suspicious activities.

  • Reputation issues: If any of the devices using the shared IP address engage in spamming, phishing, or other malicious activities, it can result in the shared IP address getting denylisted, which can negatively affect the reputation of all the devices using that IP address.

  • Performance issues: Sharing an IP address can reduce internet speed and performance, as multiple devices use the same resources.

However, internally each device or user on the same shared IP address will have a unique internal IP address. The network translates between the external shared IP address and the internal IP address of each device using a process called Network Address Translation (NAT).

What is a dedicated IP?

A dedicated IP refers to an IP address exclusively used by a single entity rather than shared among multiple users or devices. They must be bought for an additional fee from an ISP, VPN service or hosting providers to cover their maintenance. Instead of being shared among multiple users or devices, a dedicated external IP address is exclusively allocated to a single user.

This can be useful in specific scenarios and setups when businesses must enforce stricter controls of their used IP addresses. Rules like allowlisting enable network administrators to create a tight system with fewer gaps for exploits.

How does a dedicated IP work?

Dedicated IPs are exclusively assigned to a specific device or user instead of shared among multiple devices or services. This means the addresses don't reset or get assigned to other users.

The downside of this is that dedicated IP addresses cost extra. However, it allows more granular IT operations management. For example, network administrators can prevent unwarranted access to internal systems by specifying a list of allowlisted dedicated IP addresses. That way, only matching IPs can be allowed, preventing intruder connection attempts. In addition, having a fixed IP minimizes the number of captchas users have to fill in when browsing and reduces IP blacklisting to faster and more secure connections.

Can I change my dedicated IP?

Yes, you can change your dedicated IP address, but the process will depend on your specific hosting provider or network administrator.

If you have a hosting provider, you can usually contact their support team and request a new dedicated IP address. Some providers may charge a fee for this service, while others offer it free.

If you manage your network, you can usually change the IP address by configuring your network settings. This typically involves logging into your network router or server, finding the network settings or configuration page, and changing the IP address associated with your device or server.

It's worth noting that changing your dedicated IP address may have some consequences. For example, if you're using your dedicated IP for email marketing or other online marketing activities, changing the IP address may impact your deliverability rates or require updating your DNS records. Additionally, if you're using SSL certificates for your website, you may need to update the certificate to reflect the new IP address.

Finally, many VPN service providers have dedicated servers with fixed IP options. The dedicated IPs cost gets added to the total subscription amount and can be substituted on short notice.

Dedicated IP vs shared IP address

dedicated and shared IP differences

The difference between dedicated IP vs shared IP addresses boils down to their exclusivity. Shared IP addresses are freely available to all users, and their ownership rotates. Meanwhile, dedicated IP addresses are reserved for a sole entity.

In most use cases, a shared IP address is cost-effective and doesn't require any maintenance. However, using a dedicated IP address makes much more sense in business contexts.

  • Email marketing. Businesses often use an external dedicated IP address that sends large volumes of emails to customers. A dedicated IP address provides greater control over email deliverability and reputation management. It's much harder to control when sharing IP addresses with other businesses.

  • Web hosting. A dedicated IP address is typically used by businesses that require a high level of security or have specific compliance requirements. This makes it easier to ensure the website or web application is isolated from other sites on the same server and reduces the risk of cross-site contamination.

  • Virtual private networks. Businesses requiring remote access to their internal network, like remote employees or contractors, use dedicated IP addresses. A dedicated IP address ensures the remote user is always connected to the same IP address, providing greater security and control. This also enables more security customization opportunities for network administrators.

In short, shared IP addresses are both cheap and easy to maintain, and the drawback of more cybersecurity risks. On the other spectrum, dedicated IP addresses provide greater control, privacy, and security, but they come at a higher cost.

How can NordLayer help?

In conclusion, choosing between a dedicated IP and shared IP depends on your organization's specific needs. Shared IPs are more affordable and practical for individuals or small businesses with lower email-sending volume. They are not concerned about sharing the same IP address with other users. On the other hand, dedicated IPs are ideal for businesses that require more control over their online presence and security.

Buying static IP with NordLayer allows you to smoothly integrate it into your infrastructure no matter what its model with a single server. Using a Secure Web Gateway, NordLayer allows organizations to have dedicated IP addresses without the hassle of requesting them from an internet service provider. This allows consistent access policies as well as visibility and control over all employee network.

Most importantly, this can be achieved without additional investments or hardware, enabling organizations to expand and grow without the restraints of conventional manual setups. This is a flexible approach to enabling all ways of working. Get in touch with NordLayer today to discuss your network access options.

Frequently asked questions

Can I buy static IP?

Yes, you can buy a static IP address from your ISP, VPN service or hosting providers. Then you'll receive a static IP address that will remain the same each time you connect to the internet, unlike a dynamic IP address that changes each time you connect.

Not all ISPs offer static IP addresses, and those that do will likely charge an additional fee. Therefore, to understand their costs, you should evaluate their availability and pricing personally.

Do I need a dedicated IP?

Using a dedicated IP as part of robust security and secure network access solution like NordLayer is highly recommended for businesses to achieve optimal network security.

Does having a static IP improve speed?

Yes. With a dedicated IP (static IP), your own server handles your and your company's traffic — nobody else's. Therefore, performance is improved, and speed is quicker than a shared IP, which uses servers with other unknown users. 

Is sharing an IP address dangerous?

No, it's not dangerous to share an IP. It is, however, best practice to implement comprehensive access management to your vital resources, protecting them from users inside and outside your network. Ensure those attempting to access specific areas of your network are authorized/trusted to do so — having a dedicated IP address is a significant step towards this.

How do I get a dedicated (fixed) IP?

If you sign up for NordLayer's dedicated server option, you receive your dedicated IP and a server that will serve only you and your business.

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