Dedicated hosting allows you to 'rent' a piece of your web hosting provider's pie. The equipment is configured to your particular needs, with the flexibility to adapt for custom software applications, and more control.
The web hosting provider owns it, but you have greater control, without the greater cost of owning it. This is useful if you communicate to your customers through an opt-in email newsletter. You email them a link to your site which automatically runs a streaming audio or video of you 'speaking' to the customer with your message. Your web hosting provider can help you put this together on a dedicated server.
If you have more than one website, your web hosting provider can also help you to set up your server to host them all. What will this mean for you and your customers? Your web hosting provider will concur that you get better operations of all your websites, since the network and servers would be monitored around the clock by the web hosting provider.
Before you hound your web hosting provider for dedicated service, note this drawback: If you know nothing about information technology, perhaps the dedicated option is not for your business. Your web hosting provider may recommend that you save the headaches and choose the virtual server indeed. Dedicated servers are more expensive. For control and smooth operation of complex applications, your web hosting provider should be able to provide a dedicate server set up that is right for you.