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VPS stands for Virtual Private Server.
VDS stands for Virtual Dedicated Server.

Both variants denote the same type of virtual servers.

A virtual private server (or virtual dedicated server) is a server emulated withing a physical server.

From the standpoint of user control, a virtual dedicated server is a separate environment that has its own operating system, uses an allocated portion of disk space, CPU and RAM resources; a VPS uses its own IP addresses, open ports, traffic filtration and routing rules; the user also has full root access to the server which means tailoring the VPS to personal needs is absolutely possible.

In short, it's a separate fully configurable server without the need to pay the price of a dedicated server (which would be a server with separate hardware as well).

Virtual private servers or virtual dedicated servers are the main specialization of Powerhosting. Specifically, highly stable Xen-based VPS are our primary offer for all the clients who seek the power of a separate server for their web-projects.