A virtual private server(VPS) is usually built as a container on a dedicated server. The functions of a VPS work the same way as a private dedicated server. The best analogy to understand the VPS is that it is only a “piece of the pie” and from the view of the VPS, it is the whole pie. Software and plugins from cPanel, WHM, and Plesk can be installed on VPS  just like a dedicated server. The only issue with virtual private servers is that you are still sharing with others on the server, and that can possibly make an impact on performance.

For more information, see: http://en.wikipedia.org/wiki/Virtual_private_server

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