A Virtual Private Server or VPS is a basically a server within a server. Datacenters have many racks of physical servers running. A single rack server may have many VPS installations running on it, each with dedicated virtual CPU, memory and storage allocation. This is done to segregate operations and resources, and maximize the utilization of physical hardware as well as improve efficiency. So if your business is concerned about security, having dedicated resources to ensure you can handle spikes in traffic, or wish to run more resource intensive website operations, a VPS is a good choice.