Shared hosting, VPS hosting, Dedicated hosting, Cloud hosting... every hosting is a simple computer or space on a computer that works in the most perfect conditions (so-called Data Centers) 24 hours a day, 365 days a year.
On such a computer, you lease space on which you will install some kind of script such as wordpress, ERP, CRM or whatever you need.
There are simply few business entities that can afford such conditions in their premises, not to mention the maintenance and supervision of the operation of all that machinery.
That is why it is much more profitable to rent a space that is adapted to your needs and possibilities.
It all depends on how much space you need, whether you need a separate or shared IP address or hardware resources adapted to your needs.