Shared web hosting is great for most websites. You can get great features, performance, and support at affordable prices. There are however, certain cases where you’re definitely going to be better off going with VPS or Dedicated Web Hosting. If your site becomes wildly popular and you’re getting millions of hits (which most people want), then the additional server performance, flexibility, and security that dedicated hosting offers will be a huge benefit to you.
Recently, InMotion Hosting posted an article on their blog highlighting some of the reasons you might want to consider upgrading your website server. I’ll briefly summarize the items here along with my thoughts. First off, although shared web hosting servers can give you over 99% uptime, Dedicated and VPS still offer more stability. So, if you have a mission critical website, or if your online business becomes hugely successful, dedicated hosting will certainly handle the traffic load better.
Another case where Dedicated Hosting will serve you well is when your sites are using resource intensive applications. If your website contains plenty of downloadable multimedia content such as videos, you’re going to be much better off with a dedicated server. Also, if your developers need root access to the server to install or experiment with certain types of software, you’ll probably need to get a dedicated server as shared hosting accounts are usually prevented from accessing the server root.
For more details, see the complete article on the InMotion website. Just remember, shared hosting is fine for most people—especially when starting out. If your site achieves the phenomenal growth everyone would like, then you can always upgrade if you need to.