Because of these issues, the presence of users outside of your organization can be a potential security hazard. Furthermore, files destined for presentation on the web must have world readable protection so that the low privileged webserver can read the files. If you have sensitive information that is to be seen only by those who you have authorized to access to your webpages, then you need a dedicated server. Since you will know who has access to your server and what programs they can run, you can be sure that some poorly written or buggy program will not be run which could halt services or hang the machine. While Linux is very good at protecting against such unwanted program behavior, there are circumstances where this could occur.
Physical security is also an important issue to consider.
All of our virtual webhosting servers and dedicated servers have restricted access and only Stellarhost personnel are allowed access to the machines. Colocation services by definition require that the owner of the machine have access to the machine for upgrades and maintenance. While it is unlikely that the owners of the colocalized machines would have malicious intent toward other servers, one is never absolutely sure. We do not currently offer colocalization services, since we do not want to allow physical access to our server room by people outside of Stellarhost. We are in the process of building a facility for colocalizing servers, which is separate from our virtual hosting servers and dedicated servers.