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Using premier VPS technology, several isolated VPS systems are installed on a single physical server. Users share systems resources, such as the CPU and memory, but unlike shared hosting the file system is fully partitioned so they are not affected by other activities on the server. This means that up-time is more consistent, while root access to the server provides the flexibility to add and change modules and install your own software.

Share Hosting

Share Hosting Diagram
In the standard shared environment most hosts provide, accounts are set up to share the operating system and the same set of applications. Designers looking to upgrade or extend the functionality of basic shared hosting are limited by lack of root access.

Virtual Private Hosting

Virtual Privatr Hosting Diagram
VPS accounts operate independently of each other. Each has its own operating system and applications, including Sendmail, and can be customized by the owner with new applications. VPS also affords the customer a certain minimum allowance of bandwidth and processor time, so one account cannot monopolize an entire server.

Virtual Private Server offers a good balance between total control (root access privilege) and a tight budget. Having a VPS account is just like operating a dedicated server.

The short answer is - every system administrator needs it. Some examples of practical applications:

Hosting - all ranges on the same platform, from low-level shared to medium-power virtual server to powerful dedicated servers - seamless scaling up in the same safe virtual private server.
Server consolidation - put together your existing servers and use more powerful and reliable hardware.
Increase availability - keep an up-to-date copy of your virtual private server on another server, and start it in seconds in case of failure
Education - each student gets its own virtual server with root access
Testing - safe experimentation on the machine that runs another services
Clean sandbox - install each service in its own freshly created Virtual Private Server, and you will never have to resolve dependency problems.
Multiversioning - keep "snapshots" of the project you are working on and be able to switch back and forth in seconds
Improve network services security - run each server in its own Virtual Private Server. If the application has a security hole, only this particular virtual private server will be compromised, never the whole system.

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Virtual Private Server Hosting (VPS)