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Virtual Private Servers (VPS) occupy the middle ground between shared and dedicated hosting. The server is split up into virtual machines, each with their own guaranteed share of the resources. Depending on how much you're willing to pay, you'll generally be sharing a server with anywhere from 4 to 64 other sites. Like a dedicated server, you'll have full root access on your virtual machine, allowing you to configure it any way you want.

Most VPS providers offer several different "slice" sizes, with various amounts of RAM and disk space. You'll also get a guaranteed percentage of CPU time reserved for your virtual box, with the ability to "burst" (go faster) if other slices aren't using the CPU.

Some hosting providers offer managed slices, meaning they'll take care of the security and system maintenance, but most providers expect you to take care of it. If you're not familiar with running a linux server, you might be better off with shared hosting or a fully managed dedicated server.

See also: Dedicated Servers and Shared Hosts.