Shared hosting means that one physical server and its resources are shared among many websites. In other words a single physical server is responsible for hosting multiple websites with all the websites having equal right to server resources. Actually, on the shared hosting platform each customer has his own limit on particular services like disk space, monthly traffic, email accounts, FTP accounts, databases etc. In contrast all performance resources on the server like CPU, RAM, bandwidth, mail server, etc. are on a shared basis.
Shared hosting is inexpensive and to a considerable extent effective as a single physical server hosts hundreds or in certain cases even thousands of websites. Presence of large number of websites brings cost efficiency as the cost is evenly distributed among all the websites present. Shared hosting is a good option for low traffic website, and there are no viable alternatives to the low prices and low maintenance that a shared hosting plan offers.
However, you must remember that shared hosting setup is inflexible, issues of security and reliability are always present, and most importantly it fails to respond appropriately to expanding network traffic. If you want a reliable and secure hosting option for your expanding website, you must opt for either a virtual private server (VPS) hosting or dedicated hosting if you have the requisite resources.