VPS which is commonly known as Virtual Private Server is a kind of web hosting solution provided by hosting companies. Like dedicated server and shared hosting, it is a type of hosting in which you can host your site and content on the world wide web. E-service providers that offer VPS hosting have the physical servers which are virtually allocated to a specific number of users.
In Shared hosting the physical resources of the server are shared between a large number of users. You do not have freedom of customization or guaranteed bandwidth. Whereas in Virtual Private Server the server is virtualized into several virtual machines, and you have freedom of customization, and guaranteed bandwidth. All the allocated resources are yours, and no other user on the server will use or share them with you.