VPS (Virtual Private Server) server is also known as VDS (Virtual Dedicated Server) is a cost-effective alternative for fully dedicated server (DS). Often VPS Servers has almost all Dedicated Server (DS) features, but costs much less, because VPS Servers is created by virtually splitting fully dedicated server in to completely separated containers (private servers). Each VPS server is a private server with a separate external IP address and with the most other characteristics of a dedicated server, although private server is sharing dedicated server’s resources with neighbourhood VPS Servers, so costs much less than a fully dedicated server.
There are several virtualization technologies which makes possible to split dedicated server in to private servers: OpenVZ, KVM, Xen, Linux-VServer and others.