Dedicated hosting gives you the freedom of a private server (running custom applications or a specific software stack), combined with the brute power of a physical server.
It also happens that you do can't or don't want to virtualize and therefore opt for dedicated server.
A dedicated server gives you total freedom of hardware, from small economical processors to the brute power of blade servers. Not only processors but also in storage, peripherals and specific hardware requirements (eg dongles needed for licenses) provides a dedicated server you much more possibilities than a Virtual Server.
You do not have to worry about peripherals, power supply, network routing or cooling. Even custom backups and fallback possibilities are agreed in consultation.
The difference of Managed Hosting compared to a dedicated server lies in outsourcing management, a dedicated server allows you to do the management yourself which will save up on costs. It's often cheaper to outsource various parts of management and administration. That's called Managed Hosting.
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