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 is actually installed on a computer serving multiple Web sites. A single computer can have several VPSs, each one with its own operating system (OS) that runs the hosting software for a particular user.
The hosting software for each VPS can include a Web server program, a File Transfer Protocol (FTP) program, a mail server program and specialized applications for activities such as e-commerce and blogging.
The VPS alternative is often chosen by small businesses that need a customized Web site but cannot afford a dedicated server. Another useful aspect of VPS technology is the ability of a single subscriber to maintain multiple virtual servers. For example a Web site owner might use one server for the production-level Web site and the other for a "dummy site" that can be used to test planned updates, modifications or new programs.