A Virtual Dedicated Server (VDS) or Virtual Private Server (VPS) is different to a true dedicated server in that a dedicated server is a single server (basically a computer designed for websites etc…) that only you have use of, whilst a virtual server is a single server that’s shared with multiple users in a way that only you have access to PART of the server resources (hence virtual).
If a server has 8GB of memory and 2TBs of HDs for example and it’s shared between 4 users, each user will have use of 2GB of memory and 500MBs of HD space: so that would be a 2GB, 500MB HD VPS. It’s called a virtual dedicated server because each user can use their part of the server like a dedicated server.
For example on my GoDaddy VPS servers I install the control panel Webmin/Virtualmin (it’s free and well supported), whilst other users on the same server might use Plesk, cPanel, DirectAdmin or any number of server control panel software.
There are benefits and disadvantages to using a VPS vs a dedicated server, they tend to be cheaper so you can in principal get more for your money and the server company is responsible for maintaining a server that might have half a dozen users, so if hardware breaks they’ll have all the users complaining to support not just you :-)
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