What is a VPS? A Beginner’s Guide to Virtual Private Servers

What is a VPS? A Beginner’s Guide to Virtual Private Servers

By choosing to create and run a website you’ll need web hosting unless you have the capital to accommodate a dedicated web server.

Web hosting service providers, think Bluehost, HostGator, and GoDaddy, for example, provide space on a web server, typically owned (or leased) by the web host for use by clients, for a price.

In plain language, a web server is a powerful computer that stores your website’s data and files. When someone types a domain name into their web browser, the server’s role is to serve the website to the searcher’s screen.


Virtual Private Server

A VPS, or Virtual Private Server, is essentially a server within a server.


Imagine an apartment block containing 50 units.

The apartment block can be compared to a dedicated server and a single unit within the apartment complex as a VPS.

An entire apartment block is expensive, as is a dedicated server. A VPS, like a single unit in an apartment complex, is a fraction of the cost.

Buying or renting an apartment affords access to the services of the apartment complex. Similarly, using a VPS provides access to the services of a dedicated server.

To increase our knowhow, familiarising ourselves with the core elements of web hosting is essential.




Shared Hosting:

The most basic form of web hosting is known as shared hosting.

A shared server can be compared to a rental, sharing the same apartment with a number of roommates. Simply put, with a shared hosting environment, you share space on the same server with other websites.

In a shared hosting plan, you share the key resources of the server, such as CPU and RAM. Think of this as entry-level hosting. It’s low cost and effective but restricted due to a low level of customisation.

Shared hosting is best for basic websites, such as start-up blogs.

Dedicated Server Hosting:

The other side of the spectrum sits dedicated server hosting.


Rather than pooling resources and sharing the costs like a shared hosting plan, a dedicated server provides a single customer an entire server to themselves. Like owning an apartment block, it offers a high degree of customisation – you have 100% control over resources and can modify software to meet individual needs.

This is ideal for websites with a large amount of daily traffic.

VPS Hosting:

VPS hosting is a hybrid approach, balancing the advantages of shared hosting and dedicated hosting. A VPS hosting service is considered the next step up from shared hosting. As underlined above, a VPS can be compared to renting/buying an apartment.

With a VPS, a physical server hosts multiple virtual servers, or ‘virtual machines’, accomplished through software called a hypervisor. Each VPS operates independently from one another. VPS users, therefore, have access to the power of dedicated hosting, providing a cost-effective approach for web professionals and businesses.

VPS plans typically come in two main configurations:

  • Single Server VPS
  • Cloud VPS

A single server VPS hosting plan, as its name implies, is a number of VPS hosted on one physical server. A cloud VPS, however, is hosted across several physical servers that make up a local cloud.

A single server is a lower cost option as only one physical server is required to host multiple VPS. The cloud VPS configuration is pooled together to form a hardware cloud. Each server stores a copy of your website. This means in the unlikely event a server malfunction, the VPS will continue working as the data is stored on other servers – essentially offering no downtime.


Advantages of a VPS Hosting Option

  • A VPS server offers a lower cost of entry than a dedicated server.
  • A VPS offers a step-up for website owners currently using a shared hosting provider.
  • Users gain root access to the server with a VPS, a service unavailable with shared hosting. This allows freedom to install applications and make alterations without going through the hosting company.
  • Each VPS runs its own operating system: Linux or Windows.
  • VPS flexibility – upgrade your server resources, such as RAM, CPU, bandwidth, and disk space.
  • Fast migrations are possible with VPS, particularly in a cloud VPS formation.
  • A VPS service is a hybrid approach, one that balances the advantages of shared hosting and dedicated hosting.




Maybe you’re an e-commerce retailer and your website needs extra power and performance to handle additional traffic. Or maybe you’re on a budget and want to scale your web hosting solution without investing in an expensive dedicated server.

In this case, a VPS hosting package could be an option worth exploring.


The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation, or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com, and should be considered before deciding to deal with those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

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