Published: 25 June 2024
Contributors: Stephanie Susnjara, Ian Smalley
A VPS, or virtual private server, is a form of multitenant cloud hosting in which virtualized server resources are made available to a user over the internet through a cloud or hosting provider.
The cloud or hosting provider installs each VPS on a physical machine that runs multiple VPSs. While the VPSs share a hypervisor and underlying hardware, each VPS runs its own operating system (OS), such as Microsoft Windows, Linux or Ubuntu, along with its own applications. Each VPS also reserves its own portion of the machine's resources, including memory, computing, disk space and CPU bandwidth. While customers share the physical server's resources, they are isolated from each other and have access to their own dedicated resources.
A VPS offers levels of performance, flexibility and control that are somewhere between those provided by multitenant shared hosting and single-tenant dedicated hosting. While it might seem counterintuitive that the multitenant VPS arrangement would be called "private," especially when single-tenant options are available, the term "VPS" is most commonly used by traditional hosting providers to distinguish it from shared hosting, a hosting model where all of the hardware and software resources of a physical machine are shared equally across multiple users.
At the other end of the continuum, some cloud providers, including Google Cloud, Amazon Web Services (AWS), Microsoft Azure and IBM Cloud®, offer a level of hosting isolation and privacy beyond a multitenant cloud server. Two common models include dedicated hosts and dedicated instances. In both models, the user is getting access to virtual resources and is likely taking advantage of a managed hypervisor but is doing so on dedicated, single-tenant hardware.
Differences between providers can be genuinely significant when considering use cases for virtual private servers. For traditional hosting providers, a VPS represents a nice balance of cost, flexibility, scalability and control between shared and dedicated hosting. These qualities make it a good fit for e-commerce, apps with moderate or spiky traffic, email servers, customer resource management (CRM) and more.
But beyond that, virtual servers from major public cloud providers are more robust and feature-rich. They are among the foundational building blocks of modern cloud computing and form the foundation of modern server hosting and global data centers. They can handle much more diverse and scalable workloads than traditional on-prem setups. They can also reduce the number of physical servers needed, lowering hardware and other IT costs. Virtual servers even reduce energy costs because they require less energy to run and cool.
In a report from the International Market Analysis Research and Consulting Group (IMARC Group), the global virtual private server market reached USD 4.5 billion in 2023 and is expected to reach USD 13.3 billion in 2032, displaying a 12.4% growth rate during the forecast period.1
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Building on the concept of "tenancy," the three main categories of server hosting—shared, VPS and dedicated hosting—can be compared to different types of housing:
- Shared hosting is analogous to apartment housing, where tenants share services such as parking, the laundry room and the swimming pool.
- Dedicated hosting resembles single-family home ownership, where everything—including the property itself—is owned and dedicated to a single owner.
- VPS hosting lies somewhere in between—comparable to townhouse or condo living—where each occupant has more of their own services (laundry, parking and many more) but still shares a town green, health club and other broader, common physical infrastructure.
Shared hosting is the most basic, cost-effective form of hosting. In shared hosting, the resources of one physical machine are made available to all tenants in equal proportions. Shared hosting is ideal for basic, personal websites and web apps with little traffic, few technical requirements and limited performance or security requirements. Many of these sites are built with WordPress, the widely used open source content management system.
In a shared hosting model, because all tenants are allocated a finite amount of an individual server's capacity, providers do not allow websites to scale beyond the plan's limits. Nevertheless, shared hosting is the model most susceptible to the "noisy neighbor" phenomenon, in which certain tenants' applications unexpectedly consume more than their allotted share of resources, causing performance problems for other tenants.
For more information about shared hosting, see "What is cloud hosting?" and "Web hosting: An introduction."
As noted, VPS hosting services are considered a premium option compared to shared hosting. In VPS hosting, shared resources are made available to a user who has greater control over system specifications, guest operating systems and the overall software stack than is the case in shared hosting.
It's important to note that while VPS hosting falls between shared and dedicated hosting in terms of control, price and simplicity, it is the most scalable of the three models and the closest relative of the VMs/virtual servers offered by most public cloud providers.
Unlike shared and VPS hosting, dedicated hosting offers users access to all the hardware resources of a given server. Dedicated hosting provides the greatest levels of isolation, security, performance and control compared to VPS and shared hosting.
Dedicated hosting is also the most expensive of the three models because of the level of hardware resources allocated to a single customer. It's also more cumbersome to scale than VPS because scaling requires the provider to configure and provision new physical hardware resources.
The term "bare metal servers" is sometimes used interchangeably with "dedicated servers." Still, providers offering bare metal typically offer more cloud-like characteristics in their dedicated servers, like provisioning in minutes versus hours (which dramatically reduces downtime), billing in hourly increments (versus monthly) and providing higher-end hardware, including graphic processing units (GPUs).
A VPS is commonly understood as a single virtual machine (VM) on a piece of physical hardware shared with other VMs. Dedicated instances and hosts—which place the virtual machines on single-tenant, dedicated hardware—bring another level of isolation, control and visibility to VPS hosting.
- Dedicated host: A dedicated host rents an entire physical machine and maintains sustained access to and control over that machine, its hardware and whatever software is installed. This model provides the maximum amount of hardware flexibility and transparency, workload control and placement. It also offers some advantages for specific bring-your-own license software.
- Dedicated instance: A dedicated instance offers the same single-tenant isolation and control over workload placement but isn't coupled with a specific physical machine. That means that it's an instance. So, for example, if a dedicated instance is re-booted, it might wind up on a new physical machine—a machine dedicated to the individual account, but nonetheless a new machine, potentially in a different physical location.
Dedicated hosts and dedicated instances vary slightly in their management options, pricing models and visibility.
Industries like telecommunications, retail, healthcare, banking, financial services and insurance continue to widely adopt virtual private servers because they provide secure, scalable and cost-effective hosting solutions.2 These sectors use VPS for hosting websites, foreign exchange trading platforms, game servers and data storage and backup.3
Today, cloud providers offer several hosting options, customized plans and add-on services to meet an organization's specific business and technology needs. Three basic VSP hosting models have emerged: managed VPS hosting, self-managed VPS hosting and semi-managed VPS hosting.
Managed VPS hosting allows an organization to offload all server management responsibilities to a VPS hosting provider. The provider is responsible for all significant server responsibilities spanning physical servers, networks and other underlying infrastructure, along with most application and software maintenance. Other related duties include core updates, security updates, OS patching, backup and performance monitoring and optimization. This managed service allows client organizations to focus more on creating content, design, marketing strategies and so forth to support their websites and applications. Fully managed hosting is the most expensive option, allowing users to tap into a managed service provider's support team around the clock.
In an unmanaged (also referred to as self-managed) VPS hosting setup, an organization's own systems administrators are in charge of server management. This setup typically requires extensive technical expertise, like knowing how to install Linux, Apache, MySQL and PHP (LAMP). LAMP provides a proven set of software solutions used to build today's high-performance web applications. Unmanaged VPS hosting is a good choice for organizations seeking full control and flexibility over their hosting environment.
Semi-managed VPS hosting (also referred to as partially managed hosting) lies somewhere between managed and unmanaged hosting. The hosting vendor provides the physical server and its availability, core updates and some software support, while the customer retains control of installing web applications and so forth. In this scenario, hosting vendors offer add-on support services like troubleshooting server issues or help with security configurations, including firewall setup.
- VPS control panel: The VPS control panel allows users to manage their VPS via a graphical user interface (GUI) to help streamline server management processes. For instance, the VPS control panel enables users to carry out tasks like building and managing domain names and websites, installing applications, configuring databases, customizing server security and more. Depending on the type of hosting plan you choose, it might include control plane software like Linux-based cPanel, but some charge extra fees for software licenses and installation. Other popular control plane software includes SPanel, Plesk, Virtualmin and Webmin.
- Root access: Root access refers to the highest level of administrative control over a computer or server. It is required to manage user accounts, install software and so forth. Depending on the provider and the type of hosting plan, an organization's in-house IT administrators can exercise full root access to control their server completely.
- NVMe and SSDs: Today's most cutting-edge VPS technology integrates non-volatile memory express (NVMe) and solid-state drive (SSD) technology. NVMe SSD storage capabilities deliver faster response times in a VPS environment than traditional hard disk drives (HDDs) resulting in high-speed delivery and optimal performance.
VPS security relies on cloud security practices designed to address external and internal threats to business security. These measures include a range of practices and solutions, such as identity and access management (IAM) tools, firewalls, backup and disaster recovery, SSL certificates and secure VPNs to create secure and encrypted data in transit. Automated, AI-driven security tools for VPSs provide DDoS protection and can predict other security breaches or attacks in real-time.
Today, sustainable practices are a chief concern, and a VPS server can help an organization reduce its carbon footprint. Server virtualization allows multiple virtual machines to run on a single physical server, reducing the need for multiple servers and thus consuming less power. Additionally, a VPS uses resources efficiently, scaling up and down to meet demand and eliminating wasted energy spent on unused resources. Today, many VPS hosting providers are moving toward operating their data centers with renewable energy sources such as wind, solar and hydroelectric power.
The isolated environment and a dedicated IP help ensure better uptime and reliability by eliminating the slow down caused by “noisy neighbors.”
The isolation of resources in a VPS provides a heightened security environment compared to a shared hosting environment. For instance, if one client’s account is compromised, it won’t affect others using the same server.
A VPS provides built-in cost control, as you pay only for the resources you use. Many VPS hosting vendors allow you to select from hourly, monthly or contract billing options to best suit your virtual server workload demands and budgets.
A VPS is highly scalable, allowing you to add or remove resources as needed. For instance, load balancers can be scaled up or down in response to traffic and increase web page load times.
VPS hosting offers more control than a shared setup. For instance, you can install customized software applications and select the best security options to meet your needs.
- E-commerce website hosting: A VPS's dedicated resources ensure the high availability and speed that e-commerce sites demand, especially during peak usage like flash sales. Cutting-edge security features associated with a VPS also ensure that customer data remains safe and secure.
- Backup and recovery: VPS hosting can be used for backup and recovery by configuring automated backups and duplicating and storing data securely.
- Development and testing (dev/test): A VPS environment supports development and testing environments, so software application developers can use it as a secure workspace to collaborate with other team members remotely.
- Edge computing: VPS hosting extends across cloud environments, including edge locations, for reduced latency and improved performance.
- Microservices (microservices architecture): A VPS provides the scalability and flexibility to support microservices, the cloud-native software development approach in which a single application comprises many loosely coupled and independently deployable smaller components or services. Microservices are deployed in containers (such as a Docker) and managed by containerized orchestration tools (like Kubernetes).
- Artificial intelligence (AI) and machine learning (ML): VPS dedicated resources support the resource-intensive needs of AI algorithms and workloads that require intensive processing power and memory.
- Gaming servers: A VPS has become a popular choice for hosting gaming websites. It offers an affordable, scalable way to access cutting-edge resources along with more stability and reliability than a shared hosting environment.
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