This is for those who need and can afford their own servers and do not want to share with others. With dedicated hosting you rent your own server and with co-location hosting you own your own server (although not the physical loca­ tion of your server - which is why it is termed "co-located" - your web server machine will be sharing a building with other web server machines).

The advantage of co-located / dedicated servers is that you can tailor the ser­ vice to be exactly what you want, rather than something off-the-shelf that you have to adapt to.

However, although costs can be quite reasonable at the lower end of the mar­ ket, you will need to know how to manage your own server in such cases. The more expensive the service, the more support you will get in running your web server. So you will either need a lot of money, or a lot of expertise, one or the other, if you are going to use dedicated or co-located hosting.