A Virtual private server (VPS) hosting plan is a hosting plan that can be described as a cross between a shared hosting and a dedicated hosting plan.

A web hosting provider utilizes powerful software called virtualization software, to create partitions on a server’s hard drive that are independent of each other.

 Each partition acts as it own server and receives its own IP address. The partitions are then leased to clients. Clients receive root access over a partition which allows them to fully control their hard drive partition. They can install whatever operating system or software application they want and can utilize their VPS server for whatever function they desire much like with dedicated hosting. However, all partitions still utilize the same physical resources of a server i.e. CPU, Memory, much like a shared hosting plan.

One of  the key differences  between a shared hosting and VPS hosting is that unlike a shared hosting plan, a client with a VPS server is guaranteed to receive a fixed amount of space and bandwidth on a server, and generally performance for sites on VPS servers is much higher. Also, because VPS partitions are independent of each other, a client’s data is much more secure on a VPS server than on a shared hosting plan. There are also generally far less sites installed on a VPS hosting server than on a shared hosting server.

These features make VPS hosting a highly cost-effective option for small or medium sized businesses, as it is a far less expensive option in comparison with dedicated hosting, but still provides the control and flexibility that one would get with a dedicated hosting plan.