'VPS' stands for Virtual Private Server. It is a virtualized server that mimics a dedicated server within a larger physical server. VPS allows users to run their own operating systems and applications while sharing resources with other virtual servers. This technology provides a cost-effective solution for businesses that require more control, customization, and performance than shared hosting offers. VPS hosting is commonly used for web hosting, application development, and testing environments, making it ideal for small to medium-sized enterprises.