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When a number of servers run on the separate virtual machines in a single physical computer, then each of those servers is called a "virtual server". An internet hosting service that runs on the virtual servers of the hosting machine is called the virtual private server web hosting.
It should be noted that although each servers of the virtual server hosting service runs on a single physical computer, the system is a close functional emulation of multiple servers running on separate physical computers.
The concepts underlying virtual servers are the ideas of multiprogramming and time sharing. An illusion is created that there is more than one physical computer, operating system, hard disk drive, etc. Each of the virtual servers can use a separate operating system, and each can be rebooted individually. Additionally, there is a high level of security because there is complete isolation between each of the different virtual environments.
In a way this is a bit like shared web hosting (multiple web sites running on one computer), but the level of separation between the website is much closer to dedicated server hosting, since, to the the software on each website, it appears as if that website has exclusive control over its own computer.
The advantage of virtual private server hosting is that each virtual server can have its own custom configuration (like dedicated server hosting), each virtual server has very high degree of protection from problems caused by other websites (much more so than shared web hosting), but server costs can still be shared between multiple customers. As a result, virtual private server hosting tends to be intermediate in price between shared web hosting and dedicated server hosting.
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