Teams adopt Azure Dedicated Host for licensing terms, compliance requirements, or isolation guarantees. Those are sound reasons, and they come with a consequence that rarely makes it into the decision: every VM on that host now shares one physical failure domain.

Redundancy that looks correct in your architecture diagram provides far less protection when two replicas of the same service land on the same dedicated host. Anti-affinity rules operate on logical placement. Hardware doesn't care.

Gremlin helps you verify that your placement distributes risk instead of concentrating it. Install the Gremlin Agent on the VMs running on your host, then use Shutdown experiments to remove one and confirm the service stays available. CPU and memory experiments apply pressure to a single VM so you can watch whether its neighbors degrade alongside it, which tells you how much isolation you are actually getting.