VPS web hosting
VPS hosting
Virtual Private Servers (VPS) - when, where, why
Virtual private servers (also referred to as virtual dedicated servers by some) are, in laymen terms, servers within servers. They are a virtual servers (hence the name) inside a physical server, with their own operating system. Their main advantages and disadvantages come from this special nature of theirs.
The VPS varieties
A VPS hosting service can be managed or unmanaged. This means that securing the VPS, upgrading software, patching the kernel etc. can be done by the hosting company -- managed, or by the customer -- unmanaged. "Managed" can have a lot of meanings, depending on the provider. Some will take care of everything, some will act only upon the customer's request, some will only handle certain operations etc. This isn't always properly explained on the web host's website, so a prospective customer should detail his needs/expectations and get a confirmation from the host prior to signing up.
Unmanaged hosting is, understandably, cheaper. This cost difference is taken even further by the fact that the vast majority of managed services providers require a paid control panel to be installed on the VPS. With an unmanaged one, this is a cost that can usually be avoided if the customer is willing to forgo the usage of cPanel, Plesk etc and make do with Webadmin or other free alternatives.
VPS hosting - the advantages
A main advantage is the fact that you get low level access to the hosting environment, so you can customize it for your needs, as opposed to a shared hosting environment, where you must fit the norm. With most of the VPSes on offer you get root/admin access, so you can install just about any piece of software that you require (or, in the case of most managed services, the host will install it for you upon request).
A second selling point of VPS is the increased isolation between user accounts. The physical server is shared, but amounts of data transfer, disk space, memory and CPU can be allocated to be used by you and only you (so called "guaranteed" memory). This reduces the number of scenarios where one customer's sudden website success can result in the server performing slowly for everybody. In effect, customers are all grounded to their room.
There are also burst allowances, so that a VPS with say 512MB of memory may use 1GB of memory for a short while, provided that the extra memory is readily available. This burstable amount is not to be relied upon for continuous usage though (think minutes rather than hours).
This increased isolation works the other way around too, meaning that there will be few scenarios where the hosting company might suspend a VPS or ask you to upgrade. This can still happen when there's a very high disk activity for example.
Another area where the VPS has an advantage is the IP usage. In most shared hosting environments you can only have one dedicated IP assigned to a shared hosting account. This is not the case with a VPS, where you can assign dedicated IPs to each website if you so require, because you cancreate as many end user accounts as you want (the provider might still ask for a reasonable motive to issue additional IPs). The VPS comes with a number of IPs out of the box, so your websites, from the start, are not sharing the IP with other people's sites. In a shared hosting environment your sites will by default be sharing an IP with the hundreds of sites of other customers. In this scenario, the IP stands a chance to get blacklisted from time to time, either because one of the customers is sending spam willingly, or because a poorly maintained application is exploited by a third party (read hacker).
Many shared hosting providers, but especially the cheaper ones, will put various limits on the type of websites or content you may have. Proxy sites, file storage websites, adult content etc. are likely to be disallowed. This is rarely the case for VPS services though. To be on the safe side, you still must read the Terms of Service carefully.
A VPS is usually cheaper than a dedicated server. If you don't
require the full power of a server but require customization that can't
be found in a shared hosting environment, a VPS can give you exactly
what you need. There's also the added benefit of better undelying
hardware. For the same money that you're paying for a VPS you many find
very basic dedicated servers, but sometimes it's better to share a
modern
Cadillac with a couple of other customers than drive in your own 1990's
Hyundai. 
A VPS can be easily upgraded to a bigger VPS, and eventually to a dedicated server when needed. Some providers make it especially easy to change your VPS's capabilities, which may come in handy if you expect your websites to have fluctuating traffic levels.
VPS hosting - the disadvantages
The cost of a VPS is typically higher than that of a similar shared hosting account. This is the result of overhead (running multiple operanting systems on the same hardware is a waste of resources), licensing fees (control panel, VPS software), and, in the case of managed VPSes, manhour costs. In fact, running a control panel alone can use up to 256MB on each of the VPSes running on the server. So, if the VPS comes with 512MB of memory, you only actually have about half of it available for your websites to run. If there are say 16 VPSes on the server, that means 4GB of memory used by control panels alone; a huge waste, leading to increased costs.
The maximum computing power of a VPS will be reduced compared to a full-fledged dedicated server (less overall memory, less CPU). This can result in a less than perfect performance of scripts compared to a dedicated server, and even to a shared hosting environment. In shared hosting, provided that the server is loaded properly, each customer gets almost full, instantaneous, momentary access to the computing capabilities of the entire server.
At a certain amount of traffic, like any machine, the VPS will strain or even buckle under the load. A small VPS will be really limited in its ability to sustain even short peaks in traffic, if they are of a significant size.
Reseller or VPS?
Many new small hosting providers face the decision of choosing between using a reseller account or a VPS. There is a lot of interest from VPS providers to turn reseller hosting customers into VPS users. Another possible explanation for the demand of VPS is the number of customers disappointed with shared or reseller hosting, following experiences with providers that failed in their management of servers. However, a small, entry level VPS should not be regarded as a replacement for a quality reseller hosting account. A relatively big VPS may become an option though.
The only reason to go for a small, entry level VPS instead of
a reseller account would be the need to offer reseller accounts, while
lacking
the financial resources for a full dedicated server. This sort of
decision however should be the
exception, rather than the rule. If the reseller hosting provider lacks
in quality, it is time to look for a better provider, not "upgrade" to
a VPS. After all, if your VPS hosting provider would turn out to be a
dud, you'd be looking for a better VPS provider, not upgrade to a
dedicated.
Semidedicated or VPS?
Often, when a website becomes too much of a strain on a shared hosting environment, the customer is asked by the hosting company to upgrade to a VPS. This, often being 3-6 times more expensive than their previous hosting, will certainly be perceived as an upgrade by the customer. This is not so cut and dry though. It is actually a solution that will definitely help the host get rid of a potential source of instability, but has a good chance of costing the customer money, performance, and even risk website stability. Again, the customer will naturally be attracted by a VPS that doesn't increase his financial load too much, so the first choice will be a small VPS. But a VPS is, almost by definition, only a slice of a server. If the website's usage was reaching levels that were deemed risky for an entire server to cope with, the n-th part of a similar server, is hardly ready to take on the challenge.
Now, some shared hosting providers are unreasonably strict or prudent, or on the contrary, they may keep their servers packed to the brim. In both cases they may push for the upgrade sooner than it is really necessary. A VPS is almost guaranteed to be a success in this scenario, because the site isn't actually very busy.
But that is more of an exception. If your website's success really
puts you
outside the realm of typical shared hosting ($10/month or thereabouts),
then what you really need is significantly more computing power. This
is all, of course, a matter of cash. Basically, to get more, you need
to
pay more, but with a VPS you must pay for the overhead (discussed
above)
and then pay for what your site is really using. There is an
alternative, which is essentially just a more expensive form shared
hosting, which is usually advertised as "semidedicated hosting". The
host basically promises that no more than X similar accounts will be
placed
per server. No more overhead, but you do have the limitations of shared
hosting -- you're relying on the hosting company's ability to keep
everything running smoothly and ensure that everybody gets their
money's worth. Semidedicated means that there's also a definite chance
of getting your account suspended if it is threatening the stability of
the server.
Overselling VPS
Many customers buy into the whole concept of the VPS because of the "guaranteed" nature of resources. This often leads to an implied and assumed claim of no overselling involved. In fact, in most circumstances, a VPS can be oversold if the hosting company decides to. If it mismanages this, it can translate into poor server performance and even bouts of downtime. Go by the company's reputation regarding service quality, and don't assume that what you've been guaranteed is necesarily there for you and you alone.
Are VPSes for everyone?
Reading the advise of some of the VPS providers out there, you'd think that a VPS is always a better hosting solution, for anyone. But, that's rarely the case with anything in life, and the virtual private servers are no exception. For the average user, who is not a server administrator but a business or website owner, a VPS will often be an unecessary and expensive complication. But a VPS can also be a match made in heaven if you require almost complete control over the hosting environment, and you're ready to pay the premium to get it. Just don't buy one because it's cool, because it's the trendy thing to do. Buy it if you really need it! As for me, I'm a happy LiquidWeb customer, because I needed a VPS for my HostPeek.com website.