If you contract out your web hosting needs to a web hosting company then you have various choices when it comes to how your website is hosted on a server. To publish any website on the Internet it needs to be located (i.e. hosted) on a web server that can publish its contents and make sure that it is available to your web visitors.
Many web hosting solutions will offer you these services but will expect you to share them with the websites of other businesses or individuals. So, here, for example, your site could be one of many sites that are hosted on a hosting server. Another option to take here is to sign up to a dedicated server system which is also often referred to as a managed hosting solution.
A dedicated or managed server solution basically means that you or your company will be given a single server upon which you can host your website and that this server will be dedicated to your use only. So, it will not host any other sites and will be reserved solely for your needs. This can be a cheaper and more convenient way of hosting your site and managing it as the web hosting company will have the servers, climate control and support staff on hand to cover your needs.
In general terms you will rent the dedicated server that you use rather than buy it yourself. The services you can be given here will vary but you will have more flexibility when it comes to choosing the hardware and software systems that are used with your server than with other web hosting solutions.