To understand what a VPS is, it’s helpful to understand what shared and dedicated hosting are as well.
Shared hosting is when a bunch of website owners rents shared server space from a hosting company. When you opt for shared hosting, you share CPU, RAM, and hard drive space with anyone else using that server.
Shared hosting is kind of like renting a private room in an Airbnb. You need a place to stay, but renting a 16-bedroom house would be expensive and overkill. It makes more sense to have your own private room, but share appliances, utilities, and common rooms with other tenants.
Dedicated hosting is for larger companies with huge websites that need an entire dedicated server to have enough power to effectively fulfill the demands of the website. Websites that get massive amounts of daily traffic, have their own operating systems, or handle robust financial transactions daily would need a dedicated server.
To stick with our Airbnb analogy, a 16-person family would rent out the entire house, instead of trying to fit 16-people into a small, private room.
VPS hosting is the middle ground. If you opt for VPS hosting, other websites will share your server, but there are some key differences and benefits. With a VPS, you get your own virtual container on a server with your own private operating system, storage, and unlimited bandwidth.
A VPS is a kind of like renting one of sixteen cabins at a resort. All tenants reside on the same property, but you have your own private house with a private kitchen, bathroom, dishwasher, washing machine, dryer, television, etc.