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A good analogy of hosting is the local shop in your area. For this business to trade, the owner must have things (products) to sell and also somewhere to sell it from (premises). Now the owner can either buy the land and buildings to operate the business from or they can rent it from a Landlord. The first choice is very expensive but does have long term benefits. The second choice is a much more cost effective way to trade if it's a start up business and the owner is unsure of how successful the business is likely to be. Even if the long term success is assured, renting with all its associated benefits can be a most attractive and logical choice for a lot of businesses.
While web pages (the products) are designed and developed on a single computer, they must be transferred to a server (or host), so that they are available to the rest of the world over the Internet. A host (the premises) is simply a computer that has a constant, high speed connection to the Internet, whose sole purpose is to serve websites to the internet. In other words, website hosting provides the place on the Internet where your Website lives.
To have a Website on the Internet you first need to have a Web server. Unfortunately, owning a Web server can be very costly and requires technical expertise that most businesses don't have or even want to have. This is where Website Hosting come in. Website hosting companies provide the equipment and other technical resources that you need without the headaches that come when you have to do it yourself. SiliconDesigns has its own dedicated server that will only be used by customers of ours. Some cheap shared hosting plans (?free > ?5pm) can serve up to as many as 20,000 websites. The impact of that much traffic on one web server can have quite a dramatic effect on website performance, not to mention all the security issues of sharing a web server with thousands of other companies and individuals you know nothing about.
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