What is a Dedicated Server?

What is a Dedicated Server

There are a few different ways to answer the question, “What is a dedicated server?”

At the most basic level, the answer would be, “A server that’s committed to one single business or purpose.” While that does answer the question, it doesn’t really provide any context so let’s dig deeper.

If you were a Web hosting company, the answer would be, “A server that’s rented by an individual or business for their exclusive use but hosted in one of our data centers.”

If you were a network manager, the answer would be, “A server that’s dedicated to one purpose such as an application server, a print server, a mail server, a Web server or another purpose exclusively.”

If you’re feeling like your head’s full of technical mumbo-jumbo jargon, don’t worry! This article will break it all down for you below. Ready? Let’s dive in!

What is a Dedicated Server?

A dedicated server is, by definition, “A server that’s rented by an individual or business for their exclusive use but hosted in one of our data centers.”

When an individual or business rents a dedicated server from a hosting company, it’s typically for one of two reasons:

  1. To host a high-traffic, resource intensive website, or
  1. To host a high-traffic, resource intensive application.

Notice a pattern?

Yep, a dedicated server is the fix when you need to handle high traffic volume and manage resource-intensive tasks.

You see, with shared hosting, you don’t have the full power of the server at your command. You’re sharing it. Thus, the eponymous name. This is fine until your needs outgrow a shared hosting set-up or, in the cases when shared hosting fails, to meet your needs in the first place.

Take a look at two common scenarios:

A High-Traffic eCommerce Website

As your business grows, so does the traffic to your website. As the volume of your transactions grows, so does the load you’re putting on your Web server.

A website with high traffic and resource needs will begin to strain a shared hosting server. Soon, both your site and the other sites sharing your server will slow down or even freeze when the server’s capacity is exceeded.

With a dedicated server, you don’t need to share. You’re free to use 100 percent of the server to handle your traffic and manage your transactions. If your needs outgrow your server, you can upgrade to a bigger and faster server, something that your growing business should be ready to support.

The downsides of hosting your website on a dedicated server include greater costs and the need to manage more of the back-end technical side than you do in a shared hosting environment.

In the end however, you may find that you have no option but to move your website to a dedicated server: if your business needs the power, you either move up or suffer the loss of business and opportunity that a slow or frozen site will bring.

A Software-As-A-Service (SAAS) Solution Server

If you’ve ever used an online solution to manage your finances, send your emails or share your files, then you’ve used a software-as-a-service (SAAS) solution already.

SAAS solutions live on the Web and as such, they need to be accessible 24×7. Successful SAAS solution companies need a server that can handle heavy traffic and super-heavy resource needs. As with the high-traffic ecommerce website example above, they need a dedicated server.

From a cost perspective, this is a wise choice. Renting a dedicated server versus buying one is cheaper up front. In addition, many hosting companies provide support, server management and backup services that small businesses can leverage.

The more technically savvy among you may ask, “Why doesn’t the SAAS provider use cloud servers?” That’s a good question.

Cloud servers are just like dedicated servers except when they’re not. You see, a cloud server looks and feels like a dedicated server — you have full control over the back end and the software and utilities you install.

However, unlike a dedicated server, a cloud server is a virtual solution, a dedicated server that exists only in name. In reality, a cloud server may well share a physical server with many other cloud servers and that means that cloud servers share some of the same drawbacks as shared hosting. Yes, they’re more secure and you have more control but once again, you’re sharing resources with others.

Because they’re cheap and easy to throw up and take down, many SAAS solution providers use cloud servers for development and quality insurance. Once their solution is ready to be updated, they move it over to the heavy-duty dedicated server.

That said, you should always research and make the dedicated vs. cloud server decision based on the needs of your business.

“A server that’s dedicated to one purpose such as an application server, a print server, a mail server, a Web server or another purpose exclusively,” was the third definition of a dedicated server. Remember?

When a business grows to a certain size, assigning specific tasks to dedicated servers begins to make sense. Even a small business on the “smaller” end of small may find it useful to do so in some cases.

Here are two common scenarios:

Taking Your Dedicated Server Hosting In-House

In either of the scenarios above, an individual or business may decide to buy and manage their own dedicated servers in-house.

The two biggest benefits of this approach are:

  1. Total control over the sever setup, configuration and management; and
  2. Complete ownership and security for sensitive customer and business data.

The downsides of owning and managing your own dedicated servers include the need for in-house technical know-how, the cost of space to house the servers and the risk of a disaster destroying your servers (if a hosting company’s data center catches on fire, they have other data centers while you do not. If you host in-house, you need to take regular data backups, store those backups offsite and arrange for a duplicate server environment to be available: that’s Disaster Recovery 101).

Internal Application Hosting

There are many small business applications that can be installed for use only by your employees. A couple of examples include:

  1. A customer relationship management solution; and
  2. A content management (both Web and internal docs such as contracts) solution.

These systems are often business critical and they need to run on machines that can handle the number of people and processes that your business requires.


While there are many answers to the question, “What is a Dedicated Server?” you can simplify the essence of the answer down to one word: power.

A dedicated server gives you the power to scale your systems as you grow your business, offer complex online services and solutions and manage your systems and data.

On the downside, using dedicated servers can be expensive and will demand more attention, upkeep and technical know-how.

In the end however, the pros will outweigh the cons, especially if you’re moving to a dedicated server because your business is growing.

Network Photo via Shutterstock


Matt Mansfield Matt Mansfield is the Tech Editor and SEO Manager at Small Business Trends where he is responsible for directing and writing many of the site’s product reviews, technology how-to’s, and lists of small business resources as well as increasing the reach of our content.

4 Reactions
  1. Thanks for the explanation. But even if I tried to explain it this way to someone, I would still get blank faces. Oh well, I guess it is better to demonstrate it as a lot where the website stands like a house. And that’s when they begin to understand it.

  2. Thank you for the informative article about the definition of a dedicated server and also your brief description on virtual private servers. Dedicated server hosting is much more powerful than shared hosting.

  3. Explained completely about dedicated server with an example, now i am clear with each point. Thanks for this Tut 🙂

  4. Very informative article. Here are some important things that everyone needs to know. Many thanks for pointing out such significant things.