Shared web hosting is where one web site server a company offers houses more than one web site.  These servers can host two to a thousand, or even more, web sites.  The more web sites a server hosts, the more resources are shared between them.  This means if one web site uses a majority of resources, other web sites might fail to work properly because they do not have access to an adequate amount of server side resources to display correctly.  This is one of the primary reasons why certain rules and regulations exist when signing up for shared web hosting.  Many web site owners using shared web hosting do not understand this idea when signing up for their service.

When you sign up for a shared web hosting service, your web site is hosted on one server with many other web sites.  Depending on the number of web sites on one server and the type of resources they need, you may find your web site slow or parts of it non-functioning here or there.  This means that another web site or cluster of sites is utilizing the same resources on the server you need.  In most cases, the priority goes to the web site accessing those resources first.  For example, if you run a forum and need to access the database, if another forum accesses that same database first, they have priority over whatever you need from the same access.  Thus, your forum may return an error while there's continues to function and vice versa if you reach that database first.

Shared web hosting is not right for everyone.  However, for most web site owners, until the traffic grows and develops, the need for anything more is not necessary.  Once you begin to outgrow shared web hosting, one of two things will happen: Either you realize it first and you move to a dedicated server or the web host will disable your site and alert you that they can no longer host you since your web site uses too many resources and is a drain for other users.  Many shared web hosting services also offer dedicated servers, but the price can be costly.