Shared Web Hosting
In a shared Web hosting services, number of websites are put on to a single server. In this way, the hosting cost get reduced and services will be also shared among all websites. But because same server is shared by many websites few limitations also comes into picture like 1) storage 2) Bandwidth and 3)Performance. These factors get largely affected just because many websites are sharing same server. This hosting service is ideal for websites that do not require a lot of bandwidth, disk storage or CPU consumption.
Dedicated Web Hosting-
In a dedicated Web hosting services, single server is dedicated to only single website hence your website is the only website hosted on the server. If your website is very popular and drive huge amount of traffic, requires a lot of disk space or run scripts that requires more than average CPU consumption then its recommended that you can go for dedicated server. Because you are not sharing server resources with other websites like shared hosting, your limit is that of the server. For example, If you are running e-Commerce website then performance is main factor while dealing with customer. If your website taking lots of time to load then may be they can find alternate option. Here you lost your customers. Hence dedicated hosting is preferable for such kind of website.