OpenVZ and Xen

The most common type of Virtual Private Server (VPS) runs on a technology called OpenVZ.

This type of VPS is allocated on a physical server and the resources are shared. The OpenVZ and HyperVM allow the administrator to allocate resources to each VPS.

Because the resources are shared it's easy for the administrator or seller to oversell or overbook the resources. In general that's ok because not everyone uses all the resources at the same time. The risk is that the server becomes overbooked to the extent that customers take a performance hit or there is no longer any bursting resources available.

One solution to this problem for both the seller and the buyer is to rent a Xen VPS. Xen technology means that the user has dedicated resources and no bursting. They also have control of the linux kernel in a way you don't get with OpenVZ.