Tina Henson, founder and CEO of Plastic Jungle, in Fresno, California, had high hopes for the holiday season. She had hired a public relations firm in November to promote the launch of Plastic Jungle's redesigned website. It's an online marketplace where visitors can buy and sell unused gift cards--or swap, say, a $25 Target (NYSE:TGT) gift card for a $25 Starbucks gift card.

Although Plastic Jungle ended up getting mentioned in newspapers in several cities, Henson didn't anticipate just how many people would be interested in trading in the gift cards they had received for Christmas. When December 26 rolled around, some 40 times the normal number of visitors flocked to PlasticJungle.com, overwhelming its Web server. Early that morning, the site crashed, the first of several outages and slowdowns that would occur that day. Henson doesn't know how much business she lost because of her server troubles, but she figures that about half of the more than 10,000 visitors who were dropped from the site, many of whom were in the middle of conducting a trade, never returned. "We thought we were prepared," Henson says. "But it was the culmination of bursts, the spikes in traffic, that got us in the end."

A single unexpected burst in traffic can overwhelm a website that isn't prepared, as Plastic Jungle discovered. In this age of blogging pundits, all it takes is one positive review to steer an onslaught of visitors to an unsuspecting website. And because so many companies rely on online sales, surviving sporadic traffic surges is more important than ever. "One trend we've seen is start-ups that crash upon launch because they can't handle traffic from sites like TechCrunch and Digg that cause an ensuing blogstorm of linkage from other sites," says Rich Miller, editor and publisher of the technology blog Data Center Knowledge.

The only way to be prepared for a sudden traffic burst is to have an immense amount of server capacity and bandwidth on tap. Traditional Web hosts typically either lease access to a shared server (used by many customers at once) or to a dedicated server (used by only one customer), either of which provides a fixed amount of capacity. Shared hosting providers, which pack hundreds of websites onto a single server, offer prices as low as $4 a month--an attractive feature for early-stage businesses. But if one of the websites on the shared server has a big spike in traffic, every website on that server will slow down or crash. That's why it's common for shared hosting providers to ask customers with frequent spikes to either take their business elsewhere or upgrade to a dedicated server. But for some companies, using a dedicated server, which can cost hundreds of dollars a month, is like buying a bus instead of a sports car because you might occasionally need more than two seats.

Now a new breed of Web hosts has emerged. They offer more capacity when needed and use so-called grid hosting, a network of formerly standalone servers that work as a team. Because the servers are connected, if a website is inundated with traffic, the grid can assign more servers to help carry the load. And it can be done for a fraction of the price of a dedicated server. Pioneers in this burgeoning field include Media Temple of Culver City, California; 3Tera of Aliso Viejo, California; and Mosso, a San Antonio-based spinoff of Rackspace, a large hosting provider that specializes in dedicated servers. Media Temple offers the lowest price for grid hosting, with its $20 a month Grid-Service package. For that price, customers get 100 gigabytes of storage and 1 terabyte of bandwidth, which is backed by hundreds of clustered servers functioning like backup generators, ready to kick in with extra capacity when needed.

Media Temple's system works by assigning each customer a monthly allotment of 1,000 GPUs, or grid performance units. It's a way of measuring how much computer-processing power is needed to handle all the hits to a customer's site. So, if a site like Plastic Jungle was particularly busy only in December, its website wouldn't go down, even if those surges put it over its limit of 1,000 GPUs. It would simply have to pay 10 cents for each extra GPU it needed that month. For websites that routinely go over the limit, though, those overage fees can add up fast. Still, Media Temple's CEO, Demian Sellfors, points out that only a few customers see huge spikes that cause them to exceed their 1,000 GPU limit. Media Temple hosts more than 200,000 websites in 40 countries with Grid-Service.

One of those customers is Jeff Schroeder, CEO of an Atlanta company called CulinaryPrep, which markets a $399 kitchen appliance designed to eliminate harmful bacteria from meat and vegetables. When the company's website, CulinaryPrep.com, debuted in August, its product was featured on Gizmodo, a popular gadget blog that draws about two million daily visitors. Traffic to CulinaryPrep's website soared, but the site never faltered, says Schroeder. The real test, though, came a few months later, when the product was featured on CBS's The Early Show. Not only did the site survive unscathed despite a surge of several thousand hits a day that lasted for days, but Schroeder says he didn't even come close to using up his allotted GPUs. "I don't think about the spikes with the website anymore," he says. "You know how some people always check to see if their site is up and running during the holidays? We just assume that our uptime is 100 percent."

For all the benefits that grid computing can bring, however, it also results in complexity. Sellfors concedes that he needs to periodically iron out the wrinkles in Grid-Service, which has suffered occasional outages of its own. Sellfors has high hopes for the company's next-generation grid-based product, Cluster-Server, which he says will feature improved redundancy, more servers, and better software. The one thing that won't change, Sellfors says, is the flexible price tag. "It makes a whole lot of sense for customers to pay as they go," he says. "If you can do it with your gas bill or your phone bill, why shouldn't you be able to pay for what your website uses, too?"