A VPS is a Virtual Private Server. You sign up for a service that provides access to virtual server resources that are an agreed fraction of the physical server resources. There are a lot of providers that sell cloud hosting online, so it helps to know beforehand what to look for before you buy, here are some tips from Rack Alley:

CPU

The first (and most important) tip is to find a provider that defines the CPU allocation you get with the VPS. For example, visit a page that shows the different plans on a provider and often what you will see is on a typical plan is “1 core” or “1 virtual core” or something equally vague. Instead, look for a plan that provides an actual server resource like one or more Xeon cores, or you risk getting an abstraction that you will not be able to check until you sign up.

Memory

Although your memory requirement will depend on your application, most providers provide RAM as a ratio of your CPU cores. Look at how much memory you need and sign up for the plan that provides the RAM you need. If you need a lot more than for something other than Los Angeles web hosting, then talk to the provider about your needs.

SSD

Always go for SSD hosting. The difference between standard disks and SSD is night and day and is worth the difference in cost. However, if possible sign up for a trial first, as not all SSD plans are equal and some might be faster than others.