VPS stands for ‘Virtual Private Server’ – which means a ‘virtual machine’ within a machine.
A VPS runs its own copy of an operating system, and customers have superuser-level access to that operating system instance, so they can install almost any software that runs on that OS. For many purposes they are functionally equivalent to a dedicated physical server, and being software defined are able to be much more easily created and configured. They are priced much lower than an equivalent physical server, but as they share the underlying physical hardware with other VPSs, performance may be lower, and may depend on the workload of other instances on the same hardware node.
VPS generally means you have an amount of dedicated resources, that your data is not in an environment where other customers share the disk and CPU/RAM – this provides you more space, security and peace of mind – it generally costs a little more – our Managed VPSes start at $50/month (where we manage the operating system upgrades for you). Unmanaged VPSes start at $15/month.