What is virtualization? Wikipedia defines virtualization as "the creation of a virtual, rather than actual, version of something such as a hardware platform, operating system, storage device or network resources". For our discussion, we are talking about hardware virtualization which is the creation of a virtual machine that acts like a real computer with an operating system. This allows a virtualization platform to run just about any operating system as long as it's supported by the platform and operating system. We're going to discuss OpenVZ pricing also because many cheap VPS servers providers out there are causing confusion by customers looking for VPS hosting. First, let's talk about OpenVZ - OpenVZ OpenVZ, known as Open VirtuZation (OpenVZ), is an operating system-level virtualization technology based on the Linux kernel and operating system. These instances are known as "containers", "virtual private servers" (VPS), or "virtual environments" (VEs). This is similar to FreeBSD jails and Solaris Zones. Advantages of OpenVZ: - Inexpensive. Most OpenVZ providers charge about $3 - 5 per month for a 128mb RAM VPS and I've seen $17 - $30 per month for a 1024mb (1GB) RAM VPS. - Flexible. While many people see this as potential for abuse, where a provider could theoretically "oversell" services and technically crash the server because of a shortage of resources (disk, RAM, etc), it shows the awesome flexibility. Need more RAM, disk space or more resources but do not want a reboot? OpenVZ resources can be reallocated on the fly without need for a reboot, like with Xen or KVM. - Standard. It seems like OpenVZ is the standard by all providers for their customers. It's easy of use, cost effectiveness and flexibility make it lucrative to system administrators. Disadvantages of OpenVZ: - VPN limitations. OpenVZ has VPN limitations such as being only able to provide PPP (PPTP / L2TP) and TUN/TAP for VPN users. IPsec, including L2TP secured with IPsec, is not supported. Full virtualization, such as Xen and KVM, remove this limitation. - OpenVZ images. Since you are unable to install with an ISO, as with Xen or KVM, you're limited to premade containers if you decide to use OpenVZ. This is good, from a ease of use perspective, but a disadvantage if you wanted to compile your own kernel, use a custom operating system, etc. so you would be at the mercy of your provider to create and offer a custom OpenVZ image for you. - Oversold. Like mentioned above with the flexibility, OpenVZ could technically be "oversold" which means guaranteed resources such as RAM or CPU is not met which causes the VPS node to reboot, causing all the containers to shutdown until the system is restarted and the containers come back from being shutdown. This is not an issue with larger providers, but mainly for smaller and inexperienced companies. Overselling is somewhat legitimate- perhaps you have a server with 5TB of bandwidth and all 100 of your customers use about 2TB combined on that VPS node. You could, if you thought it was worth paying overage fees, oversell your bandwidth to make yourself look like you offer more bandwidth. However, if you're short on memory or CPU, your VPS node is going to crash and make your customers angry. Pricing: There are many questions about the cost of VPS hosting such as what is a cheap VPS and what is overpriced. A few considerations you should make are what is your budget. These cheap VPS providers know this but before you go with the cheapest VPS, you need to consider the following: Is the cheap VPS price so low that it may be a scam? Perhaps and you should consider this: - Look at providers based on what you need such as disk space, RAM and network transfer. Look at similar offers and see the difference in price. If it's the same, then you should be OK. However, if some price is really low like the 1GB for $5 cheap VPS offers when the average providers offer it for $10 or more per month. However, this could mean two things: overselling and overhead. If the VPS is oversold, which is usually when a provider rents servers and trying to cram as much users on a cheap VPS, you will notice low disk I/O, random reboots and bandwidth being slow. Also, be careful with providers who offer a lot of bandwith for a low price- you may be dealing with an inferior quality of bandwidth with a cheap network carrier. If the provider has low overhead, which means the cost to operate the VPS business, because they own their own servers which shows that there is money invested in the business and since they own their servers providers usually colocate in a higher quality data center because the overhead is lower allowing for more to be spent on bandwidth. If a provider rents a dedicated server, this adds to overhead because of the usually higher fees with renting or leasing a dedicated server. - What is a company's reputation? Use a search engine and really research your provider of interest. I would look at forums, which are usually good to find a cheap VPS however you have to consider some things. Some people with low post counts may be hired to boost a newer company or a bad company to sucker people in the scam however the on the flip side of that, a low post count user may be an actual customer new to the forum or was asked, which I see no problem with, to give their opinion of the VPS service on the forum. Most forums, such as WebHostingTalk, validates VPS reviews by requesting verification when you submit to moderators your IP address and domain name. Conclusion: OpenVZ is a wonderful platform. Unfortunately, if its poorly maintained and on slow hardware, it has the potential like with any other virtualization platform to be painful to the end user. The risk of overselling exists, but can be minimized if you go with a provider based on reputation and not on price. You usually find overselling on "low end box" offers.