Unlike shared or VPS hosting, dedicated hosting makes your website the lone tenant on a server. To extend the housing metaphor, having a dedicated server is like owning your own home. The means that your website taps the server's full power, and pays for the privilege. If you're looking for a high-powered site—an online mansion for your business—dedicated hosting is the way to go. That said, many dedicated web hosting services task you with handling backend, technical issues, much as homeowners have manage maintenance that renters generally leave to their landlords.
Also known as a Virtual Private Server (VPS), divides server resources into virtual servers, where resources can be allocated in a way that does not directly reflect the underlying hardware. VPS will often be allocated resources based on a one server to many VPSs relationship, however virtualisation may be done for a number of reasons, including the ability to move a VPS container between servers. The users may have root access to their own virtual space. Customers are sometimes responsible for patching and maintaining the server (unmanaged server) or the VPS provider may provide server admin tasks for the customer (managed server).
How it works is that you rent hosting space from someone like HostGator, and then you host third-party sites on your rented space. You’re kind of like a middleman. HostGator does all the hard work and takes all the risk from a server point of view. This can work really well if you’re looking to diversify and are already in the web-tech sphere, say as an app developer or website builder.