What is the meaning of a 'dedicated server?

Answer 1

Most websites are hosted on Shared Servers - i.e., the server has many websites on it, and shares the server's administrative functions and a common security certificate for E-Commerce sites. Though common for most sites, for some type of sites (specific E-Commerce or sites requiring increased security) a Dedicated Server is a better option.

Dedicated Servers are those in which the domain/site owner has dedicated access and use of the server in question - there are no other sites on the server. This is preferable when the site in question requires certain elements, such as a unique Security Certificate or compliance with certain standards (such as the Payment Card Industry Data Security Standard (PCI/DSS), and needs dedicated access and control of the server. Another scenario would be if the owner has custom software / databases that require the use of specific functions/folders on the server, which isn't possible on a shared server.

Hosting Resellers and Hosting Companies do not always just use dedicated servers - they more often use Shared Servers. Dedicated servers are typically (but not always) used by larger corporations, typically with specific database requirements that cannot be implemented on a Shared Server. For example, as a Hosting Reseller, I have clients on shared servers who have general websites, but I also have clients on dedicated servers that have specific server/software needs.

The biggest advantage to a company in using a Dedicated Server hosting solution is that for standards like the PCIDSS, there are specific requirements for data security and also onsite local server protection. Having a dedicated IT staff is very expensive - a Dedicated Hosting Server solves this problem, since most hosting companies are staffed 24/7. This satisfies the need for a 24/7 monitoring and staffing, while keeping costs down.

Most major hosting companies are in fact resellers - there aren't that many actual tier 1 hosting companies. Those companies in turn have clients like myself who are also resellers - some companies can have 2 or 3 levels of resellers.