A virtual private server(VPS, also referred to as Virtual Dedicated Server) is a method of partitioning a physical server computer into multiple virtual servers such that each has the appearance and capabilities of running on its own dedicated machine. Each virtual server can run its own full-fledged operating system, and each server can be independently rebooted.
The key advantage of VPS is allowing each VPS administrator access to the root level of his virtual server. This kind of access allows the administrator to install and delete software, set permissions, create accounts – in short, do everything that the administrator of a 'real' sever can.
If your website has outgrown shared hosting and is still not ready for dedicated hosting then VPS does the trick for you. VPS offers an affordable alternative to dedicated hosting. When shopping for a VPS host, be sure to find out how system resources are divided up, the number of VPS accounts on each physical server, the method for upgrading, and the choices of operating systems.
Because a single physical server is shared between several users, the cost of a virtual server is small when compared to the price of a dedicated server. But the level of flexibility is similar (although you'll still need a dedicated server for really demanding applications or high-traffic sites).