What Is a Dedicated Server? (Definition, Benefits and Tips)

By Indeed Editorial Team

Published September 2, 2021

Dedicated servers are web hosts that create a single server for one company or organization. Companies can use them for a variety of purposes, from running an internet website to saving data in backup storage files or email services. A dedicated server can also provide a high-speed connection, making your business website responsive and efficient for customers' use. In this article, we discuss what a dedicated server is and what businesses use them for, along with advantages and several tips for deciding if a dedicated server is right for your business.

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What is a dedicated server?

A dedicated server runs only one specific application or service, which businesses and organizations can reserve for use either through the internet or through an internal company intranet. A dedicated server can be a powerful, efficient and reliable system that can handle large amounts of data and processes. Companies often use dedicated servers as their primary web servers and install the physical hardware in a data center.

Because dedicated servers can serve as web hosts, a specific host may assign the physical hardware and internet connection appropriate to your account type. This allows for flexibility in what software packages you use, how much bandwidth you need and when there's downtime on other dedicated servers. Web hosts typically market these servers as being able to handle a specific type of work, such as games or video streaming. Dedicated servers also have their own power supply and may allow the owner to control the number of users on their machine at one time.

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What are some business uses for dedicated servers?

Companies with large amounts of data or high-traffic websites often use dedicated servers. Large corporations may use dedicated servers because they need a high level of uptime and security. However, smaller businesses may also benefit from the service a dedicated server provides. Companies typically run their own dedicated server on-premises, but may also lease dedicated hosting from an outside provider. As a website owner, it's essential to know how many visitors your website gets so that you know if you need to upgrade to a dedicated server. Consider several more uses for a dedicated server :

Securing confidential financial data

Dedicated servers often offer advanced security and safety for important financial and accounting information for businesses. For example, a banking institution might keep financial records and account information on a dedicated server. Investment firms and brokerages may also employ dedicated servers to secure financial records and provide access to only authorized individuals.

Organizing patient information

Confidentiality and security are also important for record-keeping in the health care industry. Therefore, medical organizations often use dedicated servers to secure confidential data that contain sensitive information, such as health and insurance records. A hospital, for example, may organize patient records, statistics and staff information within its database on a dedicated server to ensure data security.

Monitoring sales and customer service

Online business transactions can also benefit from having dedicated servers. This is because a dedicated server provides protection against fraudulent activity, interception and hacking attempts. For example, an e-commerce site might use dedicated servers to protect their customer base's credit card information. Personal information like mailing and shipping addresses, purchase records and dates of birth are also secure through a dedicated server, making this an effective application for online shopping transactions.

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Advantages of a dedicated server

Dedicated hosting is common in large corporations with websites that need significant reliability for uptime, security and high-speed processing. One major benefit to using dedicated hosting is the security of having your own hardware and internet connection. A dedicated server is also much faster than a shared hosting account, which can be beneficial if you plan on running an online store or another type of website that requires high capacity, such as a video streaming platform. Consider several more advantages of dedicated servers over shared hosting services:

  • Fewer limitations on bandwidth and storage space than shared hosting

  • High reliability and minimal maintenance

  • More processing power than shared hosting

  • Faster upload and download speeds

  • More stable connection and performance for online browsing

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Tips for deciding if a dedicated server is right for you

When deciding if a dedicated server is right for your business there are several factors to consider, such as bandwidth and required personnel. Dedicated servers may also require strict budgeting, as some provider services may cost more than others . Additionally, you can choose between on-premises and could-based hosting providers. To better determine if a dedicated server is the right choice, consider the following tips:

  • Review your budget. Dedicated server hosting typically has a higher price tag than shared hosting, though it offers more customization and better performance. Consider consulting your budget to determine if cost dictates server selection.

  • Analyze your needs. Dedicated servers offer more space than shared hosting servers, so gather an accurate assessment to know exactly what features suit your needs best.

  • Consider your staffing size. Knowing if you have the proper size team to handle the required server maintenance can help you ensure maximum efficiency.

  • Evaluate your company's website traffic. If your company website experiences a high volume of internet traffic, a dedicated server can provide the bandwidth you need to keep customers' connections fast and responsive.

  • Research the service provider. Reading reviews and testimonials from customers of certain providers can tell you more about the service and support quality and whether these services meet your business's needs.

  • Try different servers before you decide. Many companies offer free trials for dedicated server packages, which can help you evaluate various features and functions to ensure it's the right host for your company's needs.

  • Think about your security needs. A dedicated server is an ideal solution for a company that requires a maximum level of security and reliability, as many providers offer end-to-end encryption and two-step authentication processes to access private data.

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