VPS stands for Virtual Private Server.
When your website has outgrown your shared hosting plan and you can’t afford the price of a dedicated server, then VPS is for you. Most webmasters see VPS as the stepping stone to dedicated servers.
A VPS is basically when you take a server and divide it into smaller independent servers where each of these smaller servers run on their own operating system and private environment but share the same hardware. VPS is most suitable for website owners that need an isolated hosting environment (for safety and performance purpose) and special hosting features (such as custom firewalls, SSH access, dedicated IP addresses).
Each private server has its unique file system and gets a guaranteed fraction of the server’s disk space, CPU power, bandwidth, and memory. Hence, a website hosted on a VPS runs on an isolated environment where its performance will not be affected by other websites. Also, a VPS does not share web applications and services with other websites thus it eliminates the risk of downtime or hacks due to other’s mistakes.
VPS users get full root access. This allows server customization – you get to install your own software/application and manage your server as you would on a dedicated server.