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We are deciding whether to keep one of our servers as strictly for one site or usage with multiple site (a name-based virtual hosting setup). Is there an expensive processing cost with multiple sites running from the same server?

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J.T.Sage has the answer to your performance question (e.g. no meaningful hit if you can otherwise handle the added traffic), but you also need to carefully consider any security implications. Particularly if your sites are dynamic, you need to take into account that without taking additional steps, all code will be executing as the Apache user, and by definition will have access to the files of all the sites being hosted. –  Nicholas Knight Nov 9 '09 at 16:01

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It depends on your server package to some degree, but apart from the increased traffic the machine will need to handle (all the sites rather than just one of the sites), the performance hit is pretty unnoticable for the first couple hundred virtual hosts. Adding a virtual host to apache is a particularly painless process, more so once you get the hang of it.

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It's not a big deal. In terms of processing power it's less than a lot of standard URL rewrite rules.

Unless all your pages are pure html, you'll see much higher process costs on the scripting engines.

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