VPS v/s Dedicated Server

I have seen companies are selling VPS at a very cheap price compared to dedicated server. As per my knowledge, VMWare is mainly used to create virtual machines and each machine requires Windows Server License. How the companies are offering VPS at such a low price? is there any catch? if both have the same performance then why would I pay more money for dedicated server? Do you guys know how this Virtual private Server is created?
sg2009Asked:
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top_rungCommented:
Very generically, you can fit many VMs on any given hardware server.  Thus, price is naturally lower with less overhead.  Also, direct hardware access will equate to faster performance. Lets' say you are running many VMs on one server and they are all writing to the same data drives, sharing RAM cycles, etc. then you have less performance per VM then if you had the dedicated server solely at your disposal.
top_rungCommented:
Oh, I forgot to also mention,  licensing would be much cheaper.  Per MS,

"Run up to four software instances at a time in virtual operating system environments on a server under a single server license. "

I don't know if that directly applies to a 'reseller', but I suspect its cheaper.

sg2009Author Commented:
Do you mean 4 VPS running on one hardware need only one license of MS Server?
Shalom CarmelCTOCommented:
actually each VPS needs its own license.
when you rent a VPS from an ISP, the rent costs include the OS license costs, so you don't need to buy it yourself.

the ISP acts as a "reseller" of licenses for whatever software is preinstalled on the VPS.

however, if you rent a VPS and then decide to install on it something of your own, you need a regular license for whatever you install.

ShalomC
MarkSlingsbyCommented:
Microsoft have an SPLA (Service Provider License Agreement) that enables the hosting company to sell you MS licensing monthly.

The licensing with 4 servers 'free' is only for the Enterprise edition of server. What is interesting, is that if you license MSSQL Enterprise for a server, you can use that license in ALL the virtual machines. But the catch is that the license is PER CPU.

Virtual servers are much cheaper yes. But you also get a portion of the resources only. Look for guaranteed performance from the hosting company.

Virtual machines can actually work out even better, you get to 'burst' the CPU usage, so if the other customers on the hardware arent using the CPU, you can burst into that unused CPU and utilise it. Make sure you have access to sufficient RAM and also a minimum guarantee in terms of CPU.

You could alternatively purchase a dedicated server and put Xen or VMWare on there yourself and cut it up giving you access to all the features of virtualisation. If you only need 1 VM, buy a proper one on shared storage with minimum SLA.

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