People with massive amounts data to store and feature in websites have a definite need of a computer system to do these things. However, the cost of equipment can sometimes prohibit such acquisitions, especially for start-up or non-profit applications. For these people, webhosting options are likely the best course of action. Some providers offer resources that cater to this small scale operations at much cheaper costs. Some even offer free use of Software that can really help in low budget situations. However, providers also typically provide high end resource allocations for sites and databases that have grown with time and success. Thus, webhosting is really a good alternative to purchasing and maintaining a dedicated server.
Also, the best thing about webhosting is the Security it provides. Note that some clients share a single computer system and anything that happens to one, like a hostile virus infiltration can spread to others. Thus, it is the business of providers to assure the safe existence and operation of all client owned system.