A virtual private server is a service option in which businesses lease a virtual machine (a private instance of an OS) on multi-tenant physical hardware.
As a virtual machine, a VPS is less expensive than leasing physical hardware. Moreover, it gives the customer a much higher degree of administrative control over the operating system than a multi-tenant hosted server. A VPS is a good fit for organizations that want to manage their own environment but avoid the infrastructure and capital costs of on-premise hardware.
A VPS is a virtual machine—a single piece of physical hardware partitioned into multiple, virtual OS instances. Thus, other customers may have virtual machines hosted on the same physical server. It is functionally equivalent to a dedicated physical server but may not meet strict regulatory or security requirements.