Having your website hosted on a server is quite simple and straightforward with today's technology. Many people use very cheap and simple to use shared hosting accounts. This is a good solution when your budget is limited or you don't get much traffic yet to your site. But there are several reasons why you might opt for a dedicated hosting service instead.
Traffic
This refers to the amount of people that view the website. The best way to measure this is by looking at AW Stats inside your hosting account. The more people that visit your site, the more data has to be transferred from the server to the visitor.
For low volumes of traffic, a shared hosting account will work just fine, as you will not be creating the levels of data transfers that will start slowing down the server. However, once your website starts attracting very large volumes of traffic on a very regular and consistent basis, there will be a quite noticeable slowing down of your website loading times. This can prove detrimental, as potential and existing clients may get fed up waiting for a page to load.
No Server Bottle Necks
With a shared hosting account your website is hosted on the same physical server as the websites of many other people. This can quickly result in bottle necks that significantly reduce the page load times of your website. Having slow loading times can also affect your ranking in Google.
The more websites there are on one server, the higher the risk of any one of those site causing a lot more traffic to be created. With a dedicated hosting account, your website or websites are the only one on the server, which will result in an immediate decrease in page load times as you are no longer sharing the connection speed.
Security
Even if your website does not have a huge amount of traffic, it is quite possible that you can benefit from the increased security of a dedicated server. If you collect very sensitive customer data, then a shared server poses some significant risks that are alleviated by a dedicated service.
First of all only your organization and the hosting provider have access to the server, meaning there is less risk of a malicious attack on the server and the data being stored. Secondly, even non-malicious actions of other website owners experimenting with scripts and database access can result in the entire server going down.
Custom Upgrades
As your site and internet traffic grow, you may find that you have additional requirements to ensure that your online side of the business functions as needed. With dedicated hosting services, you can have physical modifications made directly on your server that can help boost performance and security.
As you can see, while traffic is the primary reason for switching to dedicated services, there are other reasons that could cause you to consider upgrading you web services.