A virtual private server refers to a software system that operates on the same physical computer as other systems, but is functionally separate. This software can be configured to run a separate operating system, even one that is different from the other users. Despite being on a shared computer, it has the full functionality of a physical computer, including customizability and privacy. It is different from shared hosting in that each website is hosted on its own server. Dedicated hosting is reliable, but generally too costly for smaller businesses. It also often requires more advanced technical knowledge to manage. On a shared server, which is much cheaper, complications with one website can affect the rest, even going so far as to bring them all down. Space is also an issue, as a high-traffic website can bog down other sites on the same server. A virtual private server is allotted a specific amount of resources from the main computer, including CPU and RAM. With a limit to the amount of resources available, you avoid the problem of having your own site pushed aside by excess traffic to another customer's website on the same server.
A virtual private server serves as the balance between the two. In cost, it is similar to the price of a high-end shared server. However, in practice it acts more like a dedicated server. This means that troubles and changes with other sites hosted on the same computer do not affect your own. They are on the same computer, but on different servers. Similarly, changes to your own server do not affect the rest. Make changes or even shut down the entire server without it making a difference to other users on the computer. While the CPU, or central processing unit, is still shared, the RAM and disk space are dedicated.
A virtual private server is a perfect option for those that have grown large enough that there is not enough space on a shared server, but not quite so large that a dedicated server becomes necessary. It offers a panel that is easier to manage and does not require as much technical knowledge as a dedicated server, but still more customization than a shared server. Dynamic content, high traffic (especially if it's irregular, coming in sudden bursts), multiple sites to manage, and a large file storage are all reasons why you might want to consider getting a virtual private server.
A VPS is cheaper than a dedicated server, but offers many similar benefits, including customizability and independence. The cost is similar to that of a shared server, but the service is more reliable with less downtime. With a shared server, your site is affected by other sites on the same host server. This includes technical issues another site may be having, which can shut down your own site, or heavy traffic which takes up more of the shared computer's resources. A virtual private server uses the same physical computer, but runs as though it were separate. Because it is divided, your site performance is not affected by other users, despite using the same machine. You are allowed a specified portion of the main computer's resources, eliminating the down time caused by high traffic in shared hosting. You can also customize your server the way you want, including installing your own programs and even the operating system.