Stands for "Virtual Private Server." A VPS is a server created using software virtualization. It functions like a physical server, but it is a virtualized instance created within a server. A single physical machine can host multiple virtual private servers. A cloud-based VPS may be hosted across multiple servers.
The most common type of VPS is a web host. Many web hosting companies offer VPS hosting solutions as an alternative to shared hosting and dedicated hosting. A VPS sits in between the two options, usually in both performance and price. Like a shared host, a VPS may share the resources of a physical machine with other hosting accounts. However, a VPS is custom-configureable like a dedicated hosting solution it is isolated ("private") from other accounts.
Both single-machine and cloud-based VPSes are managed using a software program called a hypervisor. The machine that runs the hypervisor is called the host machine and the individual virtual private servers are called guest machines or guest instances. The hypervisor can start and stop the virtual machines and allocates system resources, such as CPU, memory, and disk storage to each VPS.
Virtual private servers have become a popular choice for web hosting because they offer many benefits of dedicated servers at a lower cost. They also provide the added benefit of easy scalability. Since each VPS is virtualized, the configuration can be updated with a software modification rather than a hardware upgrade. Still, dedicated servers often provide better performance since all the resources of the physical machine are dedicated to a single server.