The term VPS and its variations
VPS stands for Virtual Private Server. You’ll also hear similar terms like:
- Virtual server
- Virtual machine (VM)
- Cloud server
- Cloud VPS
- Virtual dedicated server (VDS)
- Droplet (DigitalOcean’s branding for their VPS)
- Slice (an older term from Slicehost, one of the early VPS pioneers)
These terms are often used interchangeably, though some providers draw subtle distinctions or use unique branding. The core concept is the same: a virtualized server environment that acts like a dedicated machine but runs on shared physical hardware.
How we got here: from physical to virtual
In the early days of web hosting, every customer got their own physical machine. If you needed a server, a technician would rack a physical box in a data center, install an operating system, and hand you the keys. Simple, but expensive and inflexible.
Then virtualization arrived.
Hypervisor software made it possible to run multiple isolated server environments on a single physical machine. Each virtual server gets its own allocated CPU cores, RAM, and storage, but the underlying hardware is shared efficiently across many customers.
This changed everything. Suddenly you could spin up a new server in minutes instead of days. You could scale resources up or down without swapping physical hardware. And hosting providers could offer dedicated-like experiences at a fraction of the cost.
The rise of cloud giants (and what they actually do)
Amazon Web Services (AWS) popularized the term “cloud computing” and became the dominant player in the industry. Their EC2 service made VPS hosting mainstream for developers and enterprises alike.
Here’s what many people don’t realize: AWS, Google Cloud, Azure, and smaller VPS providers like ServerPoint all run fundamentally the same technology. We all use virtualization to carve physical servers into smaller virtual machines. AWS has more data centers and more marketing, but the underlying technology is no different from what a smaller provider offers.
The difference comes down to pricing models, support, and whether you’re comfortable navigating complex billing structures. AWS charges for everything: bandwidth, API calls, storage operations. Smaller providers typically offer simpler, more predictable pricing.
The technology behind VPS: KVM
The most important technology powering modern VPS hosting is KVM (Kernel-based Virtual Machine).
KVM is a virtualization technology built into the Linux kernel. It turns Linux into a hypervisor, allowing it to run multiple isolated virtual machines, each with its own operating system. KVM provides:
- Hardware-level isolation between virtual machines
- Near-native performance because it uses hardware virtualization extensions (Intel VT-x, AMD-V)
- Full virtualization so each VPS runs a complete, unmodified operating system
Older virtualization technologies like OpenVZ shared the kernel between containers, which created security and compatibility limitations. KVM gives each VPS its own kernel, making it behave exactly like a dedicated server.
At ServerPoint, all our VPS hosting runs on KVM. This means you get true isolation and can run any operating system that supports the x86 architecture.
What can you do with a VPS?
A VPS can run almost anything you’d run on a dedicated server. Common uses today include:
- Web hosting: Run websites, web applications, or APIs
- Self-hosting: Host your own email, file storage, password manager, or other services instead of relying on third-party SaaS
- Databases: Run MySQL, PostgreSQL, MongoDB, or any database server
- Development and staging: Test code in an environment that matches production
- Game servers: Host Minecraft, Valheim, or other multiplayer game servers
- VPN and proxy: Run your own VPN server for privacy or remote access
- Machine learning and LLMs: Run AI models, fine-tune language models, or host inference endpoints
- Automation and bots: Run scheduled tasks, scrapers, Discord bots, or automated workflows
- Docker and containers: Host containerized applications
- CI/CD runners: Run your own build and deployment pipelines
The flexibility is the point. Unlike managed services that lock you into specific configurations, a VPS lets you install whatever you need.
What you get with a VPS
When you rent a VPS, you get:
- Dedicated resources: Your allocated CPU, RAM, and storage are yours alone
- Full operating system: A complete Linux or Windows installation
- Root or Administrator access: Full control over your server environment
- Isolation: Your VPS is separated from other customers on the same physical hardware
This means you can install any software you want, configure the server however you need, and run applications that require system-level access. It’s your server, you just don’t have to worry about the physical hardware.
Three types of VPS hosting
VPS hosting services generally fall into three categories:
Unmanaged VPS
You get the server, and everything else is up to you. The hosting provider maintains the physical infrastructure and network, but you handle:
- Operating system updates and patches
- Security configuration
- Software installation and maintenance
- Troubleshooting and problem resolution
Unmanaged VPS is the least expensive option and gives you complete control. It’s ideal if you have technical knowledge or want to learn server administration.
Unmanaged VPS with cPanel
This is a middle ground. You still manage the server yourself, but cPanel (or a similar control panel) provides a graphical interface for common tasks:
- Creating email accounts and websites
- Managing databases
- Installing SSL certificates
- Setting up backups
cPanel removes much of the command-line work, making server management accessible to people without deep Linux expertise. You still need to keep the server updated and secure, but day-to-day operations are simpler.
cPanel requires a separate license. See our guide on installing cPanel on your VPS for details.
Managed VPS
The hosting provider handles server administration tasks for you:
- Operating system updates
- Security patches
- Basic monitoring and maintenance
- Technical support for server issues
Managed VPS costs more but saves you time and headaches. It’s a good fit if you’d rather focus on your application than on server maintenance.
You must keep your server updated
Let’s be direct: if you run an unmanaged VPS, you are responsible for security updates.
You cannot go months or years without installing security patches. Unpatched servers get hacked. It’s not a question of “if” but “when.” Attackers actively scan the internet for vulnerable servers, and an outdated system is an easy target.
The good news: keeping a server updated is not hard to learn.
- ServerPoint’s Client Portal includes a feature to manage OS updates automatically
- Most Linux distributions can be configured to install security updates automatically
- Ask your favorite AI assistant to explain the commands if you’re unsure
If you’re not willing to maintain your server, choose managed hosting or use cPanel to simplify operations. And regardless of your choice, sign up for our VPS backup service. When something goes wrong, whether from a hack, a bad update, or an accident, backups let you recover.
Our approach: ColossusCloud
At ServerPoint, we built our own VPS platform from the ground up. We call it ColossusCloud.
ColossusCloud isn’t a resold service or white-labeled software. It’s our own platform and client portal, developed in-house over years of refinement. This means:
- Direct control over features and development
- Custom optimizations for performance and reliability
- Integrated management through a single portal
We also own all our infrastructure. Every router, switch, and server in our data centers belongs to us. We don’t rent capacity from other providers.
Multi-homed BGP across six data centers
Network reliability matters as much as server reliability. We operate six data centers, and each one features multi-homed BGP connectivity.
Multi-homed BGP means we connect to multiple upstream internet providers at each location. If one provider has issues, traffic automatically routes through others. This redundancy keeps your VPS connected even when individual network paths have problems.
Our current data center locations for VPS hosting span multiple continents, giving you options for hosting close to your users.
Is VPS hosting right for you?
VPS hosting fits well if you:
- Need more power and control than shared hosting provides
- Want dedicated resources without dedicated server costs
- Have technical skills to manage a server (or are willing to learn, or choose managed hosting)
- Need to run custom software or specific configurations
- Want to self-host services instead of paying for SaaS subscriptions
If you’re outgrowing shared hosting or want a development environment that matches production, VPS is usually the next step.
Ready to try VPS hosting? Explore our VPS plans.