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A dedicated server is a server with all its hardware completely dedicated to your software. The server is not shared with third parties, like a VPS . With a VPS, you have your own virtual server that uses the hardware of the underlying dedicated server.
In the case of a dedicated server, or also called a bare metal server, you can make full use of all the computing power present in the server with your software. There is no virtualization layer in between, so you have less overhead and can always use the maximum performance.
If you are looking for maximum performance for your website, application or software, a dedicated server is often the best solution.
A dedicated server can do everything a VPS can, only you have much more performance than with a VPS. Thus, a dedicated server is often used as:
A dedicated server is always hosted in a data center. This ensures that the server is always accessible from anywhere in the world and has the highest performance in terms of Internet connection.
A data center is equipped with a redundant power supply, so that if a power supplier fails, there is still power in the building. Should the second supplier fail, power will be supplied from the UPS (batteries) to the servers, after which a diesel generator will be started which will supply the entire building with power until the suppliers are working again.
A data center is also equipped with the highest security. This means that as an outsider you cannot access the data that is on the servers, as there are often multiple layers of physical security in place. Thus, a data center is always by far the best place to host dedicated servers in.