If you look across the board at some of the biggest and brightest web hosting companies out there, you will see the trend is the same.  A lot of companies out there are looking to get rid of the dedicated servers and start offering alternatives like virtual server hosting. 

So, why is this happening?  I do think that costs have a big part to play in it.  Dedicated servers cost more to run than some of the alternatives out there.  They are bulky and hard to maintain once they get so old.  It would be like you buying a pair of shoes and the company that makes the shoes has to guarantee they still work, so every couple of years they send you an update pair.  In the long run, dedicated hosting has reached its peak of usefulness. 

VPS hosting has also grown by leaps and bounds as the eventual successor to the dedicated server hosting setup.  It is much easier to scale, setup and maintain. The only drawback for some would be the fact that it doesn’t exactly offer the customizability you might have with a dedicated server.

Some people might call me crazy for saying dedicated hosting is on the way out.  However, those same people might have never noticed the free hosting providers of the world going out of business left and right either.