Dedicated servers are suitable for Ecommerce, ASP (Application Service Provider) needs, sites requiring large amounts of disk storage, sites requiring a higher level of security and any site that requires customization of the server.
In essence it is a complete server (1 system) devoted to a single client or single website. Dedicated hosting especially for larger companies can span multiple clustered servers. Some organizations will have multiple web sites and so renting a dedicated server can be quite economical. This scenario is quite different from a virtual server that is really a single system carved up to look like a non-shared service.
Web hosting plans may be generally classified as "shared" or "dedicated." Shared hosting uses a single computer to host multiple websites, and is commonly used for small sites, startup sites, and sites with limited traffic. Dedicated server hosting uses one computer to host a single website, and is commonly used for large sites and sites with high traffic volumes. Dedicated servers often feature redundant disk drives for more reliable performance.
The client with a dedicated hosting plan leases an entire server that they don't share with anyone else. Hence the name "dedicated". The client has somewhat more flexibility, because the organization has full control over the server including the type of hardware and the operating system they choose. If the client requires server administration, the server hosting company can usually provide these services for an additional charge. Which operating systems are available? As mentioned before, the client can, in most cases, use whichever operating system they wish. Some of these are provided by the hosting company free of charge, while others are provided at an additional cost.
In many cases, dedicated server hosting can offer the client less overhead and a larger return on investment than hosting a website in-house. Dedicated servers are often housed in large data centers which provide redundant backup power sources and industrial grade HVAC systems. A dedicated server, owned and managed by a web hosting service provider, is often more cost-effective than colocation hosting.