What Is a Virtual Private Server? (With Definition and Uses)

By Indeed Editorial Team

Published May 31, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Regardless of the industry, many businesses that use technology in their processes require computer servers to store data or implement technologically-based services. Many of these businesses opt for a particular type of server called a virtual private server (VPS). Understanding why businesses use a VPS for their hosting can help you determine if the company where you work needs one.

In this article, we explore the meaning of a virtual private server, discuss how businesses utilize them, explain the factors to consider when choosing a VPS hosting plan for a business, and discover other essential type of hosting.

What is a virtual private server?

A virtual private server is a type of web hosting that grants different clients access to independent servers. Web hosting is one of the various types of internet services that allows a business to build and maintain a website. A web host also enables clients to make the site accessible to potential customers through the world wide web.

Virtual private servers mainly use the technology that creates virtual versions of storage devices, computer hardware platforms, and computer network resources. Such a server requires virtual technology to successfully divide one server into multiple virtual servers.

The primary purpose of using a VPS is the privacy it grants businesses, even with the shared hardware that's present in a VPS setup. All the servers created ensure the reservation of distinct servers for each client. Privacy is a big factor for the operation of a VPS because it greatly decreases the chances of a business sharing a CPU, RAM, or data.

Uses of virtual private servers

A VPS provides similar features as a regular server, with enhanced privacy. The concept of a VPS is various servers sharing one computer so a VPS customarily possesses limited space. Alongside relatively little storage space, the speed of data transfers is also slower than the speed of servers that belong to one client. While these two attributes of VPS may seem like a weakness, many organizations prefer low storage space because of its ability to consistently perform and reach the expectations of employees and clients.

Here are a few ways companies use VPSs:

Strengthened security features

One of the most sensitive transactions that customers can perform on a business website is online payment. Although the convenience makes it a highly sought-after payment method, there are risks associated with digital payments. These risks include mismanagement of your personal information, online activities, and details of a customer's purchases getting leaked.

A business can greatly reduce this risk by using a VPS. A VPS has various reliable resources and high quality security attributes. The superior security attributes can also help a business owner with an online store pass a payment card industry (PCI) compliance test.

The PCI standard is one of the tests that credit card brands established to ensure consumers' financial safety. It's a test that mostly occurs in the e-commerce industry, which is why a large number of such businesses use a VPS for their security.

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Increased high traffic controlling capabilities

When businesses experience sudden growths in website traffic, it's advisable to switch from any previous hosting type or to use a VPS. Using other hosting services for a website that's experiencing a lot of traffic can lead to difficulties for the business or the customers. These difficulties can include a slow website with unresponsive web pages or a server crash. As VPS hosting appears as a dedicated server to the client, all the resources allocated to one virtual server are what a single website uses. The reliability of a business website improves greatly because of the lesser strain on the server.

Increased VPN hosting capabilities

Apart from websites, there are various internet components that require hosting. One of them is a virtual private network (VPN). A VPN is a tool that individuals can use to build a protected network connection while using public networks. It basically uses the same virtualization technology a VPS uses to access connections routed through tunnelling protocols so it appears as if a computer is connected directly to another geographic location. A VPN is a good tool but its acquisition is expensive which is why some businesses host VPNs on a VPS.

The scalability and speed of a VPS allows it to be a great option for hosting a VPN server. Another benefit of using a VPS is the isolation from other clients sharing the same physical server which promotes data security.

What to consider when choosing a VPS

Here are important factors that can help you conclude if a company can benefit from using VPS:


A company's financial ability is a determinant factor in every action the company takes. Evaluate the company's budget for technological initiatives and improvements. If the company wants to improve the server memory, or have resources separate from that of other users on a server, and at the same time reduce spending, implementing VPS is the best option.


Before you decide on which hosting system is best for the organization, consider the present speed of the website and other processes you carry out on the current server. If the website responds slowly, you can upgrade your temporary data storage space to increase the response time. VPS hosting provides users with separate resources, which can help you experience faster loading times, unlike the shared hosting system.


Evaluate the traffic that you generate from your websites and how your technological resources handle the traffic. If the website or the resources on the server can hardly manage the number of users visiting your website, then you can consider upgrading to VPS. VPS can give multiple users stable and unlimited access to the websites or data on the server simultaneously.

Security issues

If you want to improve the company's cybersecurity, implementing VPS can help you achieve this. VPS gives clients very reliable resources, enhanced security features, advanced monitoring abilities, additional backup space, and a system for taking any form of online payment. VPSs are more secure than shared hosting systems.

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Server errors

With a different hosting plan, you can try to execute periodic scans to examine how often you and your team members get error messages from the website. It's possible that your users are also receiving these error messages. Upgrading to VPS can help you reduce these error messages because you have upgraded your server processing abilities.

Custom software

If a company needs customized software, custom server configuration, or other advanced technological features on the server, implementing VPS is the solution. Shared hosting is strictly for systems for standard content management without an option for customization. Upgrading to VPS hosting gives the company the ability to personalize the website and server.

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Company type

Some companies need larger resources than what the shared hosting system can provide. Companies that require large memory space, bandwidth abilities, and fast processing time can implement a VPS to help. Some companies that may require a VPS include:

  • Companies with a large force of remote employees

  • Gaming companies that develop online games

  • Companies with online stores

  • Web development or design companies

  • Cloud-computing providers

Other essential types of hosting

Aside from a VPS, here are two other computer hosting systems to consider:

Dedicated hosting

Dedicated hosting is a type of internet hosting that allows a client complete access to an entire server without sharing it with anyone else. A dedicated hosting system doesn't require any division of a server's resources. As there's no sharing, clients using dedicated hosting can gain access to all of the server's processing capabilities, bandwidth, and memory. One of the more sought-after features includes absolute customization. Users can take advantage of this customization by installing or adjusting the system's software to fit their objectives. Dedicated hosting is a good hosting system but it is typically quite costly.

Shared hosting

Shared hosting is one of the types of web hosting where a single physical server hosts various sites. The users of a shared hosting system split the system's resources, including storage and memory. Shared hosting possesses a few similarities to the VPS system seeing as they both have multiple clients using the same server. The key difference between both systems is the allocation of resources. Suppose a client using shared hosting experiences an increase in website traffic, that traffic can slow down another user's website on the same server.

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