You will need a very good hosting package to run a busy social networking and blogging site. In most cases, a shared hosting package will not be able to handle the load, even if, on paper, the package meets the requirements listed on the WordPress MU site.
You can run small WordPress MU sites on a shared host. In fact, if you know that your site will have only a small number of users (for example, if your site is aimed at members of a club or society or is used by your company's employees), then shared hosting may be all that you need.
If you're unsure how popular your site will be, look for a host that offers easy upgrades from shared hosting to a VPS or dedicated hosting so that you can upgrade if you need to. If you are creating a site for use by members of the public, don't rush out to buy a server and pay a fortune on collocation straightaway. Start small and upgrade when you need to.
A shared hosting account may be sufficient to install and test your web site, but it is likely that you will quickly reach the limits of a shared host once your site opens to the public. WordPress MU uses more server resources than a standalone WordPress blog, and you should make sure that your host will be able to cope with the demand. For a small or medium sized community, a low-end VPS account will probably be the best choice. The good news is that VPS accounts are only slightly more expensive than a good shared hosting account and, for your money, you will get a server that can grow with you as your traffic increases.
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