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What is a virtual server (VPS or VDS)?

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A virtual private server (VPS), also called a virtual dedicated server (VDS), is a virtual server that appears to the user as a dedicated server, but that is actually installed on a computer serving multiple websites. A single computer can have several VPSs, each one with its own operating system (OS) that runs the hosting software for a particular user. Although a VDS is similar to a virtual private server (VPS), there are slight differences. A VDS provides a remote dedicated server, while a VPS is a virtual machine (VM) on top of a physical server that hosts VPS instances and shares host machine resources.