Diane Aull said
1 year, 3 months ago: We used to run our own webserver (except for the ecommerce part of our site, that we outsourced). We’re a 40 year old business with our own IT department, so we were already equipped to do our own hosting. We’re located in a large city, so we have easy access to high speed connections with plenty of bandwidth.
However, our fast Internet access still represented a single point of failure. When we were hosting our own web server, we experienced several episodes of downtime, one lasting almost two days when a road construction crew severed the main cable that serviced our area. Signing up for a second provider of Internet access just to keep our site online in case the first one fell over would have resulted in more expense than management wanted to incur.
We also had power glitches and outright power failure, including another time when we were down for most of a day because a car took out a telephone pole that held the power lines for our entire neighborhood. We had a UPS for our web server, but it only provided enough power for us to keep going for 15-20 minutes before we had to shut down. It didn’t make financial sense for us invest the time and money to purchase, maintain and periodically test a generator just for those odd times when power was interrupted — but it was also undesirable to have our site off line for extended periods of time.
Eventually we decided our focus is on running a business, not becoming a hosting company.
We were already hosting our ecommerce site with an outside company. The IT manager and I realized an ecommerce server is a big ol’ target for hackers looking for credit card info. Having someone else host that part of the site meant we could sleep at night without worrying so much that the bad guys were attacking at 3am. 
So we moved all our domains and sites to the external host, and life has been easier — for me and our IT department — ever since.
There are things a web server needs to stay happy and healthy — physical security, server management, automated backups, redundant Internet connections, software installation and upgrades, backup power, etc. — that a hosting company can offer us at a very cost-effective price point (because they can spread the cost over many customers) but which in our experience were very difficult and/or NOT cost-effective for us to provide for ourselves.
We’re using pairNetworks at the moment, so far very happy with their reliability and stability.