A serious online business needs dedicated hosting, there's no doubt about it. Having your own privacy and bandwidth which is not shared with anybody is a requirement when your business gets to a certain level. The standard definition of dedicated hosting is having an entire server which is at your disposal, as the web site owner, and which is not shared with other web sites.

This indeed has far more advantages than shared hosting the web site owner has full control over his own server, including customizing the operating system, hardware, database, etc. You can personalize everything according to your feelings, while the administration is handled by the hosting company.

The most important advantage of using dedicated hosting is that your website performance will not be affected by other websites which you would have been sharing your server's bandwidth with on a standard, shared server. Dedicated hosting provides an exclusive server or servers devoted to the only purpose of serving exclusively you.

Before the existence of dedicated servers, a website owner had two basic hosting options, the low-priced shared hosting model and the premium-priced dedicated server. A web site owner who purchased space on a shared host would receive a certain amount of disk space and monthly transfer, and would have the web site served from a common web server.

The hosting company would try to provide the web site developer with many options, in order to make their products more popular. Unfortunately, a customer who needed a non-standard program installed was not allowed to do that, even with all the efforts from the hosting company. This is because you depended on other persons, and in these cases majority decides.

As a basic example, you might have a site which requires a database to store your important pieces of information. Most hosting companies would provide the MySQL database to use on their servers, because it is a standard and most webmasters use it. If your application requires another type of database though, then it could prove to be incompatible with the shared hosting account.

Hosting your sites on a dedicated server is not an option from the start though. If you plan on designing a site which is merely a hobby, then shared hosting should do the trick. Dedicated hosting is for persons who want to make a living online and, moreover, their site begins to have too much traffic than a shared server can handle.

While dedicated servers can be customized and can handle a tremendous amount of traffic, their superior performance doesn't come cheap. On average, a dedicated server can cost you hundreds of dollars per month depending on its size, network connectivity, etc.