What is Shared Hosting?
Shared hosting refers to when you rent space on a server with other clients and share the resources provided by that server, or cluster of servers. Connections to the server, bandwidth, processors and RAM are all shared between the clients and their websites on the server and, as these are finite resources, they are allocated intelligently between the accounts as necessary to meet the demands on the server. This means that you have access to server space and the benefits it offers at a greatly reduced cost but ultimately, your use of server resources will be in competition with every other website allocated space on the shared server; this is the downside of having server access for reduced cost.
Other options include a Virtual Private Server (VPS), which is a virtual machine running its own copy of an operating system on which you have your own instance; a Hybrid server, which is a shared resource like a VPS but with fewer sections and therefore more space and resources allocated to each participant; or a Dedicated server, where you rent a complete server and all of its resources.