Dedicated vs. Shared Hosting
Most companies offer that low price deal but what are you really getting for that low price? On a shared hosting plan you are sharing the server resources with other customers. If you use 10% of the CPU for example and there are 150 other customers, they would only get to share 90% of the CPU. This means that when your site has a lot of movie files being accessed at one time it will cause problems for other sites on the same server. That is when a web hosting company may ask you to move to a dedicated server plan. There are a lot of factors involved that could determine your need for a dedicated server.
Specialized programs.
If you need webcam, monitoring or chat software you would need a dedicated server. Most hosting companies will not install special run-time software for you on a shared hosting plan. They will allow you to install your own scripts as long as they don’t put too much strain on the server used for shared hosting.
Data Intense Sites
Some sites require a lot of MySql connections such as a popular bulletin board. By having a lot of connections at one time your site is keeping other sites from being able to get good performance from the MySql service. Most Web Hosting companies will ask you to move to a dedicated server if you have too many connections open at one time. This would be a lot of people using the same database at the same time.
File Restrictions
Some shared hosting servers have restrictions such as the size of email that can be sent and received, size of file that can be uploaded or downloaded. If files bigger then this limit were allowed it may make other sites unresponsive. Ask how big of a file the plan the company is offering allows you to send/receive in an email or upload/download from a webpage. If you need bigger then what they allow they would ask you to choose one of their dedicated server plans.
Audio Video Streaming
If your site needs a persistent connection to the internet such as Audio or Video streaming, then you may need a dedicated server. Most hosting companies do not allow this type of service on a shared hosting server as it will require the server to have an uninterrupted connection from your site to the internet will use a lot of CPU, memory and bandwidth and may require additional software.
Mailing List Volume
If you need to send a lot of emails at one time for example through a mailing list, you may need a dedicated server. Some companies limit outgoing email to a rate per hour. For example: 300, That means if you need to send more then that at one time you would need a dedicated server. Cron jobs can hold most mailing list addresses in a queue but say you wanted to send out 8,000 emails at 300 an hour you would have to wait 26 hours at minimum to send all your emails out. If this is your business then a dedicated server may fit your needs.
What is a shared server?
A shared server is a server where you and other accounts reside on and you share resources, disk space, link speed, and database performance with. You get the set limits on email send/ receive size limits, file upload/download file limits. You get the database version and software installed for everyone. Your sites performance and available and resources can be affected by any of the other accounts on the server. Backups are performed on a regular set schedule.
What is a dedicated server?
A dedicated server is a server you can tailor and control to run your site the way you need it run. You can get additional software installed, change email send/ receive size limits, change file upload/download file limits. You can change the frequency of backups performed. You can have additional hard drive space added as needed. You get 100% utilization of all system resources. And you can setup other websites on the same server if you wanted to. You can also the versions of software you need installed such as if you needed the newer version of PHP.