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In short, a VPS (Virtual Private Server) is just a dedicated server at a fraction of the cost. VPS hosting is also known as semi-dedicated hosting because it takes a "slice" of an actual dedicated hardware node and creates a virtual server using virtualization technology. The virtual server would have it's own dedicated resources including RAM, disk space, CPU Power, and bandwidth that is taken from the dedicated host node itself.
The host node of a VPS often features high-end server grade hardware as the server's resources can be allocated towards many virtualized servers within it. Our Dell high-end servers with at least 16GB RAM and dual quad core processors to ensure that our VPS are performing at an industry standard level and no less. A VPS is cost effective for those who want the power of such high-end resources but do not require a fully dedicated server. In most cases, a VPS hosted on a high-end node would out perform some of the low-end fully dedicated servers just because of the hardware that a VPS node features.
OpenVZ is container-based virtualization for Linux. OpenVZ creates multiple secure, isolated containers (otherwise known as VEs or VPSs) on a single physical server enabling better server utilization and ensuring that applications do not conflict. Each container performs and executes exactly like a stand-alone server; a container can be rebooted independently and have root access, users, IP addresses, memory, processes, files, applications, system libraries and configuration files.
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