Dedicated hosting solutions are ideal for larger businesses that want to run their own software or database applications . This would not normally be possible on a shared hosting platform. You can also choose which operating system to host your applications on. There is also colocated hosting where you actually own the physical server but keep it in a data center which manages a number of other servers. This would only be important if you wanted to have control of the type of hardware your site or applications are hosted on and the hosting provider does not offer these.
Data centers are usually buildings dedicated to providing services to ISPs and hosting services.
Their focus is on managing the hosting environment and providing the connectivity to the internet. One more very important factor to consider when choosing a website host is what platform you need. The major difference is the type of applications you can use on each platform. This is important if you are transferring your site from one hosting provider to another. Most however have their limitations but are fine for fun sites or personal sites.