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A virtual private server (VPS) is a virtual machine sold as a service by an Internet hosting service. The virtual dedicated server (VDS) has also a similar meaning.
A VPS runs its own copy of an operating system (OS), and customers may have superuser-level access to that operating system instance, so they can install almost any software that runs on that OS. For many purposes they are functionally equivalent to a dedicated physical server, and being software-defined, are able to be much more easily created and configured. They are priced much lower than an equivalent physical server.