What Is VPS Hosting?

How VPS hosting works

Virtualization software called a hypervisor splits one physical server into several isolated virtual machines. Each one runs its own operating system and gets a guaranteed allocation of CPU, RAM, and storage, usually with root access so you can install any software the server supports.

That isolation is the point. On shared hosting, every site draws from one common pool, so a neighbor's traffic spike or hacked site can slow yours down or put it at risk. On a VPS, their problem stays inside their virtual machine.

Shared vs. VPS vs. dedicated vs. cloud hosting

Four hosting types cover most websites, and each one trades money for isolation and control:

• Shared hosting: the cheapest option, with resources pooled across every site on the server. Pick it for new or low-traffic sites.
• VPS hosting: a guaranteed slice of one physical server, isolated by virtualization, at a flat monthly price. Pick it when a shared plan's limits start to bite.
• Dedicated hosting, where you rent an entire physical server. Pick it for high, sustained load that justifies the price.
• Cloud hosting: your site runs across a network of servers, and resources scale on demand. Pick it for spiky or unpredictable traffic.

The VPS vs. cloud call usually comes down to billing: steady traffic and a fixed budget favor a VPS and its flat monthly rate, while unpredictable traffic favors cloud hosting's scale-as-needed model. For deeper side-by-sides, see our guides to VPS vs. shared hosting and VPS vs. dedicated hosting.

Managed vs. self-managed VPS hosting

The difference is who runs the server. On a managed VPS, the host handles operating system updates, security patching, and monitoring. On a self-managed VPS, all of that is on you, usually in exchange for a lower price and fuller control. If you're comfortable at a Linux command line, self-managed works; if you'd rather never think about patches, pay for managed.

DreamHost sells both: DreamHost Managed VPS, where our team handles updates and monitoring, and the self-managed DreamHost VPS hosting, which comes with full root access.

The trade-offs of a VPS

A VPS costs more than shared hosting, and the extra control comes with responsibility. On a self-managed plan you are the system administrator: updates, security patches, and backups are your job, and one bad configuration change can take the site down with no one else to blame. Your resources are also capped at your slice, so a large enough surge can exhaust your allocation. And the physical hardware underneath is still shared.

Each risk has a fix. Short on admin time? Choose a managed plan. Worried about downtime? Set up uptime monitoring, and keep backups somewhere other than the server itself.

When to upgrade to a VPS

Don't wait for a hard traffic threshold. Watch for symptoms you can check today:

• Your site slows down or returns 503 errors during traffic spikes.
• You keep hitting your shared plan's resource limits: CPU, memory, or monthly-visit allowances. Bandwidth usually isn't the ceiling: DreamHost's Launch web hosting plan, for example, includes unmetered bandwidth but a 40,000 monthly-visit allowance.
• You need root access or server-level software your shared plan won't allow.
• You handle payment data or client sites that need isolation from neighbors.

If 2 or more of those sound familiar, read 5 Signs Your Website Needs a VPS Upgrade for the full checklist. Moving up a tier costs less than losing visitors to a slow site.