As of the date of writing/last updating this (2017-04-17) servers can use both the client build (found in the normal games section of the Steam client, Steam app id 251570) or the dedicated server build (found under Tools in the Steam client, app id 294420). Both will run exactly the same code and there is also no difference in how they are set up. There is a really important difference for Linux users though: The client build requires a running X environment whilst the dedicated build does not.

In future TFP might drop the support to use the client build as a dedicated server though as stated in the ​official release notes for alpha 8.7 (on 2014-07-09), second bullet point under "Added":

Added a new standalone Dedicated server software accessible to anyone who has purchased the game. You can find it in your steam client under Library/Tools/7 Days to Die Dedicated Server. Note: Client run coop will always be supported but Client run Dedicated servers will only be supported for a few weeks.. Server providers should run, test and migrate over to the new standalone server as soon as possible.

(emphasis added)

This means that every server administrator should switch to the server build sooner than later. Even more so as some mods will be available for the dedicated server build only as maintaining multiple builds adds more work on the modder's site.

If you are a customer of a 7dtd server provider and want to find out which build your provider is running check your output_log.txt. After startup it will print some generic information on the selected game mode etc. If it is the dedicated build there will be a line directly afterwards saying "Dedicated server only build". So that part will look like this:

2017-03-02T21:45:10 0.109 INF Parsing server configfile successfully completed
2017-03-02T21:45:10 0.109 INF Starting dedicated server level=Navezgane game name=A15
2017-03-02T21:45:10 0.109 INF Maximum allowed players: 8
2017-03-02T21:45:10 0.109 INF Game mode: GameModeSurvivalMP
2017-03-02T21:45:10 0.109 INF Dedicated server only build
2017-03-02T21:45:10 0.111 INF Starting PlayerInputManager...

If your log does not contain this line the server is running the client build and you should ask your provider to migrate over to the server build.