Virtual private servers (VPS) are parts or slices of a dedicated server that are split equally among a number of customers. The number of customers per server may vary according to the plan and cost. A VPS may have from 5 customers hosted on the server to 20-50 total customers. Shared web hosting is taking a dedicated server then putting 100+ different customers on the server. With a virtual private server (VPS) the dedicated server is split typically to less then 100 customers.
With a virtual private server the CPU power and memory is allocated to the preset number of customers and may be burstable. The important difference between a VPS and shared web hosting is that VPS customers pay more to get access to more guaranteed resources like CPU, memory, and IO nodes. While shared web hosting customers have a lot of neighbors on the same server. With a VPS the number of customers that will be your neighbors on the same server is typically a lot less.
A VPS has preset CPU power and memory allocated to each customer. Depending on the technology used you can burst or go beyond the allocated CPU power or memory allocated to your account temporarily. A VPS also gives you root access to the operating system meaning you are typically responsible for the updates, security, and configuration of the VPS. While with shared web hosting the web host is responsible for handling the security, updates, and configurations.
When starting out with web hosting you should start with a shared web hosting plan. Once you are experienced or require more computing power to serve up web pages to your visitors then you should consider upgrading to a VPS. Using a VPS also puts the burden of maintaining the operating system and being responsible for all the technical issues that you typically won’t face as shared web hosting customer.