The main advantage of dedicated hosting is that it allows you to have a server wholly for your own use. It is slightly different from a dedicated server in that here you can exclusively have a server to yourself. All that the hosting company does is manage the routine maintenance and backing up of the system.
You as the developer take up the entire software development burden. The hardware does not come alone. You get the connectivity and the relevant equipment that have already been configured for use. This is how far the renting company goes. Once the hardware is up and running, the content and operating system that runs it falls within your docket.
This however will not be under your control. Usually whoever is renting out the server retains control over these components. In addition to all this, the renting company is under an obligation to provide reliable data center facilities for use by the clients.
The thing that necessitates exclusive server hosting is the increasing demand for more high tech websites. This in turn needs to utilize bigger bandwidths that may be inconveniencing to yourself or other users on a shared server.
When you take all these factors into consideration, having one exclusively to yourself makes a lot of sense. There is also an opportunity to make some money on the side should you find that you are not utilizing it fully. You can sub rent it out to somebody who may not require such a huge bandwidth.
Probably the best thing about taking this route is the total freedom of your online existence. You can literally personalize the server starting from choosing your preferred operating system. It is a good option when you need all the flexibility of owning a server but are unable to buy one or you simply don’t wish to own it.