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Choosing a suitable hosting solution for your business can pose a significant challenge. There are a lot of options to consider, each with its own merits and downsides. Here are some situations in which virtual private servers (VPS) may be the best solution for you.

What is a VPS?

A Virtual Private Server is a powerful server that is split into multiple “virtual” servers, where each function independently - runs its own operating system and applications.

VPS is not the best fit for everyone; however it can be considered a hosting preference of choice for advanced Web developers who require root access to the server to run their own software.

Website Has Outgrown Shared Hosting 

In case your website has outgrown the space offered by your current hosting plan, then VPS can be a great solution. This is especially true if you have multiple high traffic websites to run.  A dedicated server can mean large financial and technical investment, and there lies the benefit of virtual server. A VPS offers the solution that is in between a shared and dedicated server – providing flexibility and scope but without the hefty price.

A VPS offers more resources than traditional shared hosting which is paramount if your bandwidth usage is high, and you wish to avoid slow website performance. Keep in mind that with shared hosting you actually share everything, which means that your website growth is in essence restricted and server resources can be affected by the traffic flow and bandwidth usage of other websites that you share the server with.

That is not the case with VPS as your resources are defined within your virtual environment. Not only that, you have more bandwidth and disk space, but you are making sure that your website will not be compromised by someone else's website.  If your website grows and you need to move it to another server it is rather simple to move a VPS to a new physical server.

Need to Run Specific Applications:

If for you are looking to customize your webserver or need more technical flexibility than provided by your current shared hosting plan but find the cost of dedicated server too high, then VPS is your best option. With VPS you get full root-level access to install and delete software, set permissions, create accounts and determine all aspects of your customized server environment. Since you are still sharing hardware you do not have to worry about the server maintenance and security issues.

Businesses that need many of the features of a dedicated server, but do not have the resources to physically host and maintain it, find VPS to be the ideal solution. With VPS you are able to avoid bandwidth issues and various constraints of running specific software that come with shared hosting. Virtual Private Server provides all the freedom to install, delete, reboot and do all the functions as if you have your own server.  Although virtual private servers share a common physical server, they are completely isolated from each other which enables you to get higher level of security. Each VPS can be stopped or rebooted independently.

Need More Flexibility for Website Development & Hosting

As previously mentioned, VPS offers higher level of flexibility than shared website hosting, without the  high cost associated with a dedicated server. With VPS hosting you are given the environment for development and testing for your website hosting.  You can run two virtual private servers simultaneously, one dedicated to testing and another one for your live or production websites. 
Although not physically separated you debug software, install major changes or updates in a secure environment without affecting your live websites.  On the other hand, you can use one VPS for backup or file storage. Switching between virtual servers is easy and you can use that to protect and maintain website visibility online even in the midst of extensive development work.

Conclusion

A virtual private server is not the same as a dedicated one; however it has all the features and benefits of one. You can do almost everything you would do on a dedicated server or a VPS, but VPS is significantly less expensive and it relieves you of the responsibility of maintaining the hardware behind it.

In essence if you are looking for more flexibility, features and security than offered by a shared hosting plan and are not willing to invest in a dedicated server, VPS is your perfect solution.
 

Resources:
http://en.wikipedia.org/wiki/Virtual_private_server 
http://searchservervirtualization.techtarget.com/definition/virtual-priv...
http://www.webhostingsecretrevealed.net/vps-hosting-guide/
http://wpbusinesstips.com/2014/06/choosing-vps-dedicated-hardware-buyers...

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