A dedicated server or dedicated hosting is one where you lease the machine and only your applications are being run on the machine. There are many advantages 1. More flexibility.
Since you are renting the whole server, you get to install almost any applications on top of the Operating System. Normally, for a shared server, you are limited to a set number of services available. Most shared servers are really created just for hosting your website.2.
Better performance. You have all the resources on the server for yourself. Compared to shared hosting, there are many people putting their application on the same machine and so the processor compute power and memory are divided to the number of users.
Hosting companies would usually put a cap on how much memory and CPU you can use so that a single person can't abuse the whole machine. With a dedicated server, you get to use whatever CPU and memory is available on the hardware.3. Usually, basic maintenance such as backup, availability and patches are done for you by the hosting company.4.
Better application isolation. Someone elses application will not cause your application to either fail or slow down. A disadvantage is the cost.
Leasing a whole machine would of course cost much more than sharing the usage of a server. Long term, it would cost much more than buying a server yourself and getting a fix IP from your ISP. Of course, having the server yourself, you have to manage its avalability and upgrades whereas when you lease dedicated server, the hosting company does a lot of the maintenance for you.
You should also compare this to cloud computing such as Windows Azure. With Azure, you are not given dedicated servers but instead, dedicated Virtual Machines. For more information on Azure, visit http://www.microsoft.com/windowsazure/ Here is one source for more information: http://en.wikipedia.org/wiki/Dedicated_hosting_service Here is an example of a hosting service selling both shared servers and dedicated servers: http://www.brinkster.com/default.aspx.Notice that shared services goes for $28 dollars or less per month, but dedicated servers can go up to a few hundred of dollars per month.
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