Host computers Instances

If you are talking about the Elastic Cloud Computing service (EC2), you rent Computer recourses (CPU, RAM, hard drive) as an instance because there are multiple running instance of a physical server. AWS use containers to provide the instance to consumers so each instance has a well definited memory space. In some case you could need a private computer to run very sensitive data or program license, in such case you can use a dedicated instance that will have its proper server and where the physical hardware is not shared with others.