Running in-house email servers does provide more control and wider customization as well as tracking and compliance for small to midsize businesses (SMB). But they require specialized on-site IT staff as well as the need to manually manage and support both hardware and software. A third-party hosted email service matches many of the advantages of in-house email without the expensive initial investment. The ability to manage the number of users, access the latest security protocols, and enjoy ease of connectivity and deployment of hosted solutions makes it a viable and competitive option.
A dedicated server will likely cost you more than $100 per month; it's definitely not cheap web hosting. The benefit? Your website lives on a server all by its lonesome, so it takes advantage of the server's full resources. You'll probably need to handle firewalls, updates, and maintenance yourself, however, unless you opt for a managed server, which costs even more money.