Setting up a shared hosting environment

I need to set up a shared hosting environment for an intranet and I'm looking for advice on how to best approach this using best practices.

Possible routes that I can think of:

Each user would need FTP/SFTP access. I'm debating whether or not they should have shell access and/or permission to install software via cPanel into their space. Security and ease of management should also be taken into consideration.

Thoughts?

Thanks!
 
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