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SQL server. SQL Instance vs Dedicated SQL server?

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This question is with reference to Microsoft Dynamics CRM 2015 & SQL Server 2012.

I am trying to understand what the differences/considerations are between hosting a CRM database on a dedicated SQL server compared to an SQL instance on a SQL server where there are other instances hosting other databases.

In particular this would be a question around performance - i'd imagine that a dedicated SQL Server would be the way to go, though I don't understand exactly why this would be?

Any input would be appreciated.

Many thanks,

David


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