Most people are clueless about the virtual servers hosting and how they actually work on the shared environment. It is a known fact that thousand and more number of users tend to use a server at a time. In such circumstances, each user is allocated with a designated amount of disk space, bandwidth, CPU allocation, memory and Operating System, which can be used on the server. All the Virtual Private Server users share the same CPU and RAM and think that, they have dedicated set of hardware. Virtual Server software is loaded onto the physical system and from then, a virtual server is ready to be used.
If your bandwidth usage is high and your website seems slow to perform, you may need more resources than a shared website hosting plan provides. Shared hosting means you share everything - so you're restricted in how big your website can grow, and your available resources (disk space, bandwidth, etc) can be affected by the traffic flow and bandwidth usage of other websites running on the same server.
The force driving server virtualization is similar to that which led to the development of time-sharing and multiprogramming in the past. Although the resources are still shared, as under the time-sharing model, virtualization provides a higher level of security, dependent on the type of virtualization used, as the individual virtual servers are mostly isolated from each other and may run their own full-fledged operating system which can be independently rebooted as a virtual instance.