Difference between Shared, VPS, and Dedicated Hosting

Shared Hosting
 Shared Hosting is very similar to living in an Apartment Complex. All residents are in the same location and must share the available resources with everyone - such as the pool, parking lot, and play ground. In shared hosting, all accounts (sites) must share the available resources with all the other accounts on the server - such as CPU time, memory, and disk space.

VPS Hosting
 VPS Hosting is similar to owning a Condo. While you still share things on the property, you are ultimately responsible for maintaining your own property and repairs inside the condo. There is also significantly less residents per building and assigned parking. On a Virtual Private Server, you are allotted resources that are not shared by everyone. The over all CPU time and memory are shared across all accounts on the machine, but at the same time portions of those resources are always dedicated to each account. This allows for more power and flexibility than being on a shared account. 

Dedicated Hosting
 Dedicated Hosting can be compared to owning a house. You are allowed and have access to all resources available on the machine. No one else's account resides on the machine (your house) and would not be capable of tapping into your resources.

Now that you know a little bit more about hosting, which is right for you? A VPS or dedicated server?
  

Comparison between VPS and Dedicated server 

Hardware

VPS

You are still sharing server hardware with other users. However, you server is virtualized which means it runs as though it is on a dedicated server. That means you can restart services, make modifications to server files, and create other user hosting accounts.

Dedicated

You are on your own here. The entire server is yours to play with. That means all the hardware specs (CPU, RAM, data transfer, etc.) are yours. Also, you can have more flexibility with hardware setups. For example, need an extra 500GB of storage? Then this could added by the support team for an additional fee.

Software

VPS

You are free to install whatever program you want. However, if it starts pulling on resources and starts pulling resources from other VPS customers, then this could be an issue and cause your website performance to slow or become suspended for abuse.

Dedicated

Regardless of how your software programs perform, you are free to install any programs you please. A high resource program will not affect others expcept for any clients you are managing.

Budget

VPS

Given the hardware specs and freedom you get on a VPS, the performance boost on a VPS is more budget friendly.

Dedicated

More expensive than VPS hosting because you do get your own server and better specs.