Types of web hosting - Shared, VPS and Dedicated

Shared hosting - cheap and beginner friendly

In a shared hosting environment, you share one server with other customers. These plans include the physical server and the software applications within the server. Each server works similarly to a bulked-up version of your home computer. It has hard drive space, a central processing unit (CPU), and RAM.
In a shared hosting space, the host puts hundreds or even thousands of users on a single server. It’s likely that each user has more than one site, and that means one shared server can house thousands of websites.
  • How does it work?
These services are affordable because the costs to operate the server are lower. The host shared the cost between you and these other owners. There are, however, some downsides. The main drawback to using shared hosting is that you are sharing all the servers resources with the other websites.
  • Who’s it suitable for?
If you are on tight budget, shared hosting is a great option. More conscientious hosting companies put measures in place to detect sites that can affect other users, whether their faulty code is using too many resources, or if they’re experiencing a comparatively high level of traffic. The hosts then work with site owners to help them move to a more appropriate hosting plan.

VPS hosting - more power

A virtual private server is when one physical server is shared, but it acts like multiple, separate servers. This style of hosting is the most popular service to advance to after a website has outgrown shared hosting. It's the hosting style between shared and getting your own dedicated machine.
  • How does it work?
Each VPS shares hardware and resources. The difference between this is a standard shared hosting setup. Each user is allocated a dedicated slice of the computing resources. This allows VPS hosting to avoid the bad neighbor effect while helping users save on the cost of a dedicated server.
VPS servers usually host fewer users than a shared hosting server does. Having fewer sites sharing the servers decreases the stress on resources. VPS server accounts are segmented according to each user’s account requirements.
Let’s say that you have ten users on a system with 10GB of RAM and 200GB of hard drive space on the server. Each user is allocated 1GB of RAM and 20GB of space. Once someone using the VPS hits their RAM limit, their site may go down but the other sites won’t be affected. They remain stable because of the hypervisor, a piece of management software or firmware that maintains the integrity of the system.
An added benefit of VPS servers is that they are highly configurable, providing website owners with a lot more flexibility than they experience with shared hosting. On shared hosts there isn't much chance to modify your environment due to limitations in access levels. In VPS your account is contained within a virtual machine that lets you make changes without affecting others, something that developers are happy about.
Another strong reason people jump to VPS is how scalable it is. Since you are running a virtual machine which takes some percentage of the resources available to the server as a whole, the number of resources you are allowed to use can be increased without much hassle.
  • Who’s it suitable for?
VPS services are ideal for anybody who has the extra budget for hosting that is more flexible. As a VPS performs in much the same manner as a dedicated one, it’s also better-suited for those who can manage their own platform or have access to technical resources.

Dedicated hosting - for high traffic sites

Dedicated hosting is where a single user rents the space of an entire server. Since you have the entire server to yourself, you have complete control over the server settings and most hosting companies allow you to take complete advantage of this. Dedicated hosting also features a wider range of setup options, such as the amount and type of memory included, OS installed, total storage space, and more. You are alone on the server which negates all bad neighbor effect.
  • How does it work?
In a dedicated hosting environment, you are renting one physical server from a hosting company. Dedicated hosting plans mean no more sharing with other website owners. Dedicated servers offer the highest level of server attributes you can get which fits when a website or online business grows and is getting a significant amount of website traffic.
Dedicated hosting comes with many clear benefits, but also comes with a few downsides. Since the server is yours alone, you are entirely responsible for the cost of using it.
Dedicated servers naturally cost much more than shared hosting, so it should only be considered if your business can handle the expense.
Another factor to take into account is the availability of expertise. Unless you have a server admin or sufficient knowledge to do it yourself, dedicated hosting can prove difficult. You need to know above a basic level about computers and server technology to make the most of dedicated hosting, unless you look into managed hosting solutions. With a completely unmanaged service you might need to install the OS yourself, and any tools needed to run a web server including malware removal, security scanning, and so on. To tech-savvy readers, this might not be negative, but it's something to keep in mind when considering a server.
  • Who’s it suitable for?
This is a good choice for websites that require a lot of system resources or need a higher level of security. It's time to think about dedicated hosting when you have highly specialized needs regarding your hardware, or you're looking for more control over your data’s privacy.

PS: I have removed the prices which was published on the official website 

REFERENCE: https://www.namecheap.com/hosting/types-of-web-hosting/