Occasionally friends, relatives, and clients ask me what they should do about creating and hosting a web site. When this happens, I find myself repeating, well, myself; so I thought I would put my thoughts on virtual paper for future reference. I will post a notice on this entry if my recommendations change at some future date. If you would like to consult with me about your particular setup, please contact me for consulting rates and availability.
Ok, you want a web site, good. First, get an idea of what your website will contain, how big it will be, what kind of content you will serve, and how much traffic it will receive. Will it DO something or SHOW something. If you're just starting out, or have no idea, any of the recommended plans will let you scale size and traffic for additional monthly fees, so don't worry too much about it.
If your goal is an informational, mostly text, but low volume, web site, just get a BlogSpot.com or other blog hosting account. They are free, minimally annoying, and with free image galleries and video hosting sites, can link to or embed video and photo content too. My Ward (a congregation in the LDS church) has a few of these sites for various extra activities, for example the youth group is presenting a "Fancy Dance" and Dessert Auction on Saturday Feb 19, 2011 to raise money for camp and activities this year, and uses BlogSpot to advertise. By the way, everyone is invited to the dance, and babysitting is provided, see the site for more information.
If your goal is to sell something, sell through the Amazon marketplace or Etsy.com if the products are crafty. Piggyback on top of an existing marketplace to jump start sales. If you're too big for that, I don't really have any advice. I don't have any experience in that space. I think that I would look for a host that provided merchant services (credit card processing for example) as part of the package.
If your goal is to host a medium volume dynamic application, use WebFaction. WebFaction is probably the best Shared Hosting service there is. They're one of the very few hosting providers that embraces Python application hosting, and I've run Pylons, TurboGears and CherryPy applications there. The hosting is cheap, fast, and it stays out of your way if you want it to. I host this blog, my personal e-mail and my business website on the base level account. I also host demo sites for clients when needed. The email service isn't spectacular, but it's functional as long as you have client side spam filtering like what is provided by Thunderbird. I like it because there are no set CPU limitations, the memory allotment is generous (email, OS, and even Database memory usage doesn't count against your quota, though the disk usage does), and the base disk space/bandwidth allocation is substantial. It also helps that WebFaction takes care of all data backups and operating system and hardware maintenance for you. WebFaction has one click installers for a large number of applications, so you don't have to know very much about Linux to get started, but if you do know what you're doing, you have SSH access, and everything that comes standard with a Linux shell account.
If you are planning on building a new application, take a look at Google App Engine. It lets you get going and host up to a certain threshold for free. Scaling up can be done fairly reasonably. Applications developed for App Engine can be run independently of Google, so you are not necessarily locked to Google as your hosting vendor.
I do not recommend any kind of Virtual Private Server hosting that isn't bundled as a Cloud offering. I've used three different VPS services, and two have all been slow and had high network latency (the third, Slice Host was bought and extended into Rackspace's cloud services, which I recommend below). Higher volume sites may do OK, but if the CPU, IO or Memory usage is too high for too long, your VPS can be rebooted or shut off. What this translates to is that you would have to hit a very small sweet spot to get good performance out of a VPS without getting shut down. Better hosting options exist.
If you do need system level access to a server of your own for some reason -- if for example you have an email processing system as part of your application -- or if you have requirements that extend beyond a single host, like high availability, then using a Cloud based VPS is desirable. Cloud computing nodes are designed for high performance application hosting. The overhead of virtualization is minimized by the use of advanced virtualization techniques (paravirtualization, CPU instruction sets, etc.) and by dedicating virtual resources to physical hardware. The management tools are typically excellent and, in the case of my two favorite cloud providers, there is an inherent benefit of a content delivery network (CDN) and Storage Attached to Network (SAN) which can serve as a scalable long term application storage or system backups. These two tools are used by very large websites to deliver content faster and more efficiently, and they're available on the Cloud for even the lowest rate plans. The intro level computing node at Amazon Elastic Compute Cloud (EC2) starts at 3¢/hour. Rackspace however has a node that start as low as $10.95/month (that's about 1.5¢/hour). There aren't as many third party software developers, and no external image providers (as far as I know) for Rackspace, but they have pretty good management tools, and a pretty good selection of base images to get you up and running pretty quickly.
EC2 was built for running short-lived computing (i.e., processor intensive) tasks, and it's pricing model and instance sizes reflect that. The instances and costs are very competitive to people looking at dedicated hosting. Rackspace's cloud is similarly designed, but has smaller instances, so it is cheap enough to use as a substitute for VPS or even shared hosting.
A former coworker of mine recently signed up for EC2 to host his blog using a promotional deal offered by Amazon's EC2. This deal lets you use the Micro instance for up to 750 hours per month for a whole year. Thereafter he's looking at a starting monthly rate of $21.60 plus storage and bandwidth charges. Of course using a Cloud node to host a blog is seriously overkill (as evidenced by his load average) unles he is doing much more with his site than visible at first glance. If he is uncomfortable with a free or even a paid blog hosting account, either WebFaction or Rackspace Cloud would be sufficient to host his site at about half the cost of EC2.
There is also dedicated hosting, but with the price point and performance of EC2 and Rackspace Cloud, you'd have to be very big indeed, or have special criteria not available for cloud nodes for the benefits to outweigh the costs.
Here's what I use for myself and my clients, and why I don't recommend VPS hosting:
As I mentioned above, I currently host my blog, email and business website on a WebFaction Shared Hosting plan. Shared Hosting starts at less than $10/month, with steep discounts for prepayment. I moved all the services off my VPS at Linode and shut it down since WebFaction was working so well. I found Linode to be sluggish and and network traffic to be high latency, but haven't felt that way about Webfaction.
With InMotionHosting's VPS offerings, performance was similar to or worse than Linode's. I had a client on the fully managed VPS plan costing $90/month. The VPS would bog down during traffic peaks and InMotion's system administrators would reboot the box (without any advance warning, without notice after the fact and without explanation of why). When things were peaceful, trying to log in to SSH could take 30-45 seconds, page loads for the main site or core application could take several seconds in spite of caching and being rather lightweight. InMotion always seemed to want to upsell to dedicated hosting when I mentioned the problems to their customer service representatives.
This site/application just passed through its busiest season on a Rackspace Cloud Server instance, and the it never even hiccuped. Final cost for hosting for the month? $24, and plenty of room to scale up if volume increases. I recommended the Rackspace Cloud Server because the application has an email processing system and the client has clients that could have been squeamish if their customers' names and email addresses were available on a shared host's shared database server (even though the database itself was not shared and was password protected).