A VPS is a Virtual Private Server (or Virtual Dedicated Server). It’s a sort of “halfway house” between cheap shared hosting and an expensive dedicated server.
Most people who set up their own website or blog do so on shared hosting because it’s the cheapest and easiest option available. Most shared hosting options come with “unlimited” space, bandwidth, domain assignments, email, databases and everything else a site owner needs.
The up-side is that it’s incredibly easy to set up a simple blog, a gallery or a basic app. The physical server is managed by your hosting company and all you ever see of it is a front-end control panel that gives you easy options to install common apps, FTP files, point domain names to sub-directories and so on.
However, shared hosting has a down-side. Because you’re sharing the resources with hundreds or thousands of other owners, your site can become sluggish as soon as you get a few hundred hits per day. Bump that up to a few thousand hits (or a single application that’s database-heavy) and your site’s response times can drop to insufferable speeds.
As an example from my own experience, when I had a single WordPress blog on shared hosting, it ran fine. A little bit slow at peak times but easily bearable. Response times were 1-2 seconds at worst. Then I installed a bunch more blogs and a Drupal development environment… Drupal’s very database heavy and the response times for the basic login page were almost a minute. A minute of waiting for something to happen. That’s bad.
Prices for shared hosting generally run from free (seriously) to less than $10 a month. If you just want a basic one-or-two site setup, I have used iPage (affiliate link here) and they’re fine.
Virtual Private Servers
The next step up is the VPS. This is where your hosting company gives you a server to yourself… only it’s not really a server. It’s part of a server (hence “virtual”), set aside for your personal use. There will be other people’s sites on the same machine but, given that most web servers are multi-processor beasts of barely imaginable power, you aren’t likely to notice.
As far as you are concerned, you have your own, personal server (hence it’s “private”). You can set up sites on it in the normal fashion and you won’t notice a degradation in response times with tens of thousands of hits (or more) per month.
Most hosting companies offer a stepping-stone VPS setup which starts with a “basic” level of about 40Gb disk space and 1Tb/month of bandwidth. If your site becomes popular enough to need more space or speed (or you run dozens of sites off the server and need more) you simply step up to the next level by paying more.
Once you’ve hit the top level of the VPS and have become so popular that it isn’t enough, you’ll need to move on to a dedicated server setup.
Prices for VPS setups are very reasonable. I use GoDaddy’s “economy” service (affiliate link here) for about $30 a month including cPanel – with discounts if you pay for longer periods in one shot. Their setup has five levels of VPS for businesses of most sizes and I’ve had no issues with their service at all.
This is the top end setup. You get an entire server to yourself with all its space, processing power, bandwidth and everything else for your own, exclusive use.
Mot people don’t need a dedicated server. I mean, come on, do you really need an entire web server to yourself? Only if you server thousands of gigs of data to millions of customers a month! Sure, if you happen to own a major company, you might need one but for most businesses it’s total overkill. And very expensive.