A server built with software virtualization is known as a VPS. Although it was made inside a server, it performs the same tasks as a real server. Multiple virtual private servers can be hosted on a single real computer. Multiple computers may be used to run a cloud-based VPS.

A computer server is the most typical form of VPS. As an option to shared hosting and dedicated hosting, many web hosting businesses provide VPS hosting services. A VPS typically falls between the two choices in terms of both speed and cost. A VPS may share a real machine's capabilities with other hosting users, similar to a shared server. A VPS, on the other hand, can be specifically configured like a dedicated hosting option and is separate ("private") from other accounts.

A application known as a hypervisor is used to handle both single-machine and cloud-based VPSes. The individual virtual private servers are referred to as guest machines or guest instances, and the computer that hosts the virtualization is referred to as the host machine. The virtual computers can be started and stopped by the hypervisor, which can also assign each VPS with specific system resources like Processor, RAM, and file storage.

Since they provide many of the advantages of dedicated servers at a reduced price, virtual private servers have grown in popularity as an option for web hosting. Additionally, they offer the advantage of simple scaling. Each VPS is emulated, so software changes rather than hardware upgrades can be used to update the setup. However, because a single server has exclusive access to all of the actual machine's resources, dedicated servers frequently offer superior efficiency.