VPS hosting is, as its name indicates, a web hosting service based on Virtual Private Servers. Although the websites are, physically, hosted on the same server, VPS enables the possibility of operating each one as if it was hosted independently, in a dedicated machine.
So how VPS works?
A simple way to picture how VPS works is to use the country analogy. Think of the main server as the whole country and in the different “containers” or virtual servers as provinces. You can modify almost everything within a VPS without altering the whole server or the other VPS functions, in the same way that provinces can pretty much modify their landscape without altering the way the whole country works
As opposed to a shared hosting server, where a problem with one website might cause the malfunction of the whole machine, VPS servers remain online when one container has an issue. That individual VPS goes down, but the rest of the system keeps working.
On the other hand, high traffic sites hosted in shared servers may lag the whole server, taking all of its resources, causing other websites to go offline o to be inaccessible. On a VPS machine, each container has a fix amount of resources allocated, so the server is always running smoothly.
VPS is a smart middle ground between shared hosting and dedicated hosting services. It will provide you with a reasonable amount of independence to administrate your site as if it was running on a dedicated server, but with the pricing scale of a top shared hosting service. This option is just perfect for webmasters who exceeded their shared hosting service, but are still hesitant about investing on a dedicated server.