What it means
A physical server is split into several virtual machines. Renting one gives you a VPS with a set amount of CPU, memory and storage, and full control over what runs on it. Providers include DigitalOcean, Hetzner, Linode and the major clouds.
Tools such as Coolify make a VPS behave more like a managed platform, handling deployments, databases and certificates.
Why it matters for a business
A VPS usually costs much less than managed platforms for the same power, and gives more control. The trade-off is responsibility: updates, security, backups and monitoring are yours unless someone manages them for you.
A business example
Things to watch
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Apply security updates regularly.
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Set up automatic backups and test restores.
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Monitor disk, memory and uptime.
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Limit who can log in to the server.