Because you only are using a portion of the resources for the VM, you can have several of them running on one computer or server, as is common with hosting services. A hosting provider that offers VPS hosting has a vast number of physical servers that each contain multiple virtual machines. While demarcation and intrusion prevention within the physical machine is not a huge concern on your own PC, VPS hosts must have security safeguards in place to ensure isolation of each customer’s server. That’s why the terminology virtual private server is used – to denote the attention paid to privacy and the server programs that are typically loaded onto this type of VM.

A VPS runs its own copy of an operating system (OS), and customers may 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. However, as they share the underlying physical hardware with other VPSes, performance may be lower, depending on the workload of any other executing virtual machines.[1]