What is virtual web hosting?

Virtual web hosting refers to the process of running multiple “virtual” web servers on a single physical host computer. Using this technique, a single computer can host thousands of independent web sites. Commercial web hosting service providers often use this technique to allow better manageability, efficiency and scalability of their service infrastructure.

Most virtual web hosting applications rely on virtual DNS resolution, so that a specific domain name (such as a customer’s own registered domain name) may be associated with each independent virtual web server.

Wikipedia:
Virtual hosting is a method for hosting multiple domain names (with separate handling of each name) on a single server (or pool of servers). This allows one server to share its resources, such as memory and processor cycles, without requiring all services provided to use the same host name. The term virtual hosting is usually used in reference to web servers but the principles does carry over to other internet services.

One widely used application is shared web hosting. Shared web hosting prices are lower than a dedicated web server because many customers can be hosted on a single server. It is also very common for a single entity to want to use multiple names on the same machine so that the names can reflect services offered rather than where those services happen to be hosted.

There are two main types of virtual hosting, name-based and IP-based. Name-based virtual hosting uses the host name presented by the client. This saves IP addresses and the associated administrative overhead but the protocol being served must supply the host name at an appropriate point. In particular, there are significant difficulties using name-based virtual hosting with SSL/TLS. IP-based virtual hosting uses a separate IP address for each host name, and it can be performed with any protocol but requires a dedicated IP address per domain name served. Port-based virtual hosting is also possible in principle but is rarely used in practice because it is unfriendly to users.

Name-based and IP-based virtual hosting can be combined: a server may have multiple IP addresses and serve multiple names on some or all of those IP addresses. This technique can be useful when using SSL/TLS with wildcard certificates. For example, if a server operator had two certificates, one for *.example.com and one for *.example.net, he could serve foo.example.com and bar.example.com off the same IP address but would need a separate IP address for baz.example.net.