When deciding between a VPS or a dedicated server. You should pay attention to the technical specifications of the dedicated server and the VPS.
CPU/Processing power
If the dedicated server has 1 CPU with 1 core (say a total of 2.5 GHz) versus a VPS with 2 cores (each core at 2.0 GHZ) than the VPS should technically have more power. This means the VPS would be able to handle and process more tasks compared to the dedicated because the VPS’s cores are faster and there are more of them.
With a dedicated server you are the only customer on that server. You can use all the CPU power you want without any worry about your web host complaining about excess CPU usage. With a VPS depending on the virtualization technology used on the node (the server that hosts all the VPSes) your web host may complain if you are using all of your CPU cores all time. If you are using a VPS you have to remember that you are not the only customer on that machine. Other customers may complain (depending on virtualization technology being used) if you start to cause any stability issues.
RAM/Memory power
How much memory does the dedicated server have? How much memory does the VPS have? If you order the dedicated server can you upgrade the memory later on and if so for how much? How much more memory can the VPS support and how much would it cost to upgrade the memory.
Usually with VPSes the memory and the plans are upgraded hand in hand (most of the time but not all the time). With a dedicated server the memory can be upgraded and you won’t need to upgrade the CPU or hard drives. If the dedicated server that you are interested in ordering has 2 GB of RAM and the VPS you are interested in has 2 GB o RAM than both can be comparable (memory wise).
Bandwidth/Network transfer
Depending on which web host you decide to order a web server from. The server may come with 20 TB (20,000 GB) of transfer or your web host may just include a 100 Mbps port and you can use however much that port supports. With a VPS plan the bandwidth is usually preset at a certain limit for each VPS plan.
Which should I choose a dedicated or a VPS?
If you plan on using a lot of software that are CPU intensive = go with a dedicated server
Standard http server serving up a few sites and not much else = VPS should be fine
Memory intensive software and other projects that may require CPU power = dedicated server
Bandwidth intensive usage = dedicated
When deciding between a VPS or a dedicated server. Remember to pay attention to the pricing and what your needs are and if you project within 12 months you will outgrow your existing setup or not. If you require a lot of CPU power or bandwidth than you should go with a dedicated server. If your needs do not include a lot of processing power or bandwidth usage than a VPS should work.