A Virtual Private Server (VPS) is a simulation of hardware by a host operating system that allows another operating system to run on it. Simply put, this allows web developers to host multiple “virtual” servers on just one physical server. To a developer, the benefits seem readily apparent:
Each virtual server, or “private” server, are separated from one another and only accessible via the host server. This means only the host server can access the RAM, CPU, Disk Space, Network throughput etc. For instance, a server may have 2GB RAM, 100GB of disk space, and 2 x 2GHz processors, with 10 VPSes on it. Now depending on what VPS software you go with on the host, each virtual setup either share hardware resources, or have guaranteed access to 200MB RAM, a disk space limit of 10GB, and an effective CPU of 400Mhz. This, of course, is oversimplified a bit in order to help you get the idea.