A dedicated server is a server that is leased to one company and not shared with any other clients. These servers are offered by hosting companies that usually perform most of the maintenance on them.
Dedicated servers are contrasted with shared servers. Shared servers usually host the web services of several different companies. Dedicated servers are more useful with large websites that are resource intensive.
Dedicated servers save a company money by paying another company to host, manage and maintain its servers instead of doing it internally. These host companies often perform such tasks as firewall maintenance, data back, operating system updates and many others.