16S rRNA gene sequencing targets one marker gene found in bacteria and archaea, often sequencing only part of that gene and reporting only on the bacteria. It is a well-established survey method, but that single gene often cannot separate closely related species, so results are usually reported at genus level and functional capacity is inferred from broad taxonomic groups.
Shotgun metagenomics sequences DNA across the microbial genomes present, allowing species-level resolution, coverage of archaea, fungi and protists as well as bacteria, and assessment of the functional genes present. The result is a more detailed view of both who is there and what those microorganisms are genetically equipped to do.