Virtual Private Sector web hosting (VPS web hosting) is a term used by web hosting companies who provide a virtual machine for a customer using their web hosting service. This service is a bespoke service for each individual.
The ultimate hosting service a customer would like to have is a totally dedicated web hosting service, which would mean that they were not sharing any services with other individuals or companies. This type of service comes at a huge cost due to all the systems that would have to be designed and put into place. Shared web hosting was introduced to allow many people to use the same service and therefore mitigate the cost by the number of people using the same service.
Now, VPS hosting gives an individual total separation from all other customers using the VPS service, and the big advantage here to the customer is the cost saving compared to having to have your own totally dedicated web hosting service.