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Dedicated servers differ from the standard home computer primarily by means of the operating system. Specialized versions of Windows, optimized for network operations, and UNIX are utilized by dedicated servers.
Whereas your home computer becomes a word processor, a video game system, a check book balancer, and so on, a dedicated server utilizes a minimal user interface, allowing the majority of its work to occur on the network. CPUs are similar, as are memory and storage systems; however servers tend to have vast amounts of each.
Why dedicate a server?