Virtual Private Servers (VPS) have become very popular means of web hosting. Creating VPS's basically involves splitting the resources of a very powerful server into several parts and making those parts behave as if they were independent servers. With this approach, each part, i.e VPS, can have its own operating system and software. All kinds of changes can be done to VPS without affecting any other VPS that shares the same physical server.
A VPS offers a considerable performance improvement over shared hosting (where very limited changes are allowed), but is still cheap compared to a dedicated server (which gives you complete control over the entire server). You will need quite a bit of technical knowledge to run a website on a VPS.
Besides these factors, customer support, uptime guarantee and the location of the server should also be carefully considered. A server that is physically closer to the most of your website users will load the pages faster. A VPS provider that gives you an option of monthly billing is preferable compared to the one that requires you to enter a yearly contract. It gives you the option to change providers in case you decide to do so. Some VPS providers will even credit you for the amount of time you did not use any VPS.
Just remember that selecting an affordable plan from a reputable VPS provider is always better than a cheaper plan from an obscure company.
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