IP stands for internet protocol. A dedicated IP refers to a unique address assigned to exclusively for one computer that is connected to any network. A shared IP has one address being used by several websites. Generally, in the shared hosting plans, all the accounts share one IP and this has resulted in several security and performance issues affecting all the businesses on the server.
Having a dedicated IP address on your shared hosting account gives your business many benefits. The primary benefit is you can get an SSL certificate which is mandatory for your business if it involves dealing with sensitive and critical data. You need a dedicated IP to buy an SSL certificate.
In case you wish to check how your website will look before you point the domain name to the server and make it accessible on the web, you can do so with your dedicated IP address without disturbing the DNS settings for the domain name.
A dedicated IP acts as an identity for your business and isolates you from the other accounts. There are situations when a user is banned for having indulged in spamming activities and if you are sharing a common IP, there are possibilities of your account getting blacklisted too.
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