Hosting for other people on a server you manage.
WHY ISOLATION MATTERS MORE HERE
You are responsible for the consequences. One client's outdated plugin compromising every other client's site is a business problem as well as a technical one.
WHAT TO SEPARATE
A system user per site, with files owned accordingly A PHP-FPM pool per user, so PHP runs as that user A database and database user per site Separate log files
WITH A CONTROL PANEL
All of this is the default. WHM creates isolated cPanel accounts, which is precisely what you want.
If you host client sites, a control panel is worth the licence cost purely for this.
WITHOUT ONE
Configure it deliberately. The simple approach, where everything runs as the web server user, provides no isolation at all.
RESOURCE LIMITS
Without limits, one busy client consumes the whole server. Control panels provide per-account limits; manually, you can constrain PHP-FPM pools and use system-level limits.
TESTING ISOLATION
From one site's user, attempt to read another site's configuration file. If you succeed, the isolation is not working.
