Virtual Servers have increased in popularity in recent
times, but have existed for decades. When they were
invented, they were only useful to those with a great deal
of processing power. At the time, this type of power wasn't
commonly available to the public, so the equivalent to the
VPS was used in large businesses, educational institutions
and government agencies. With the introduction of free,
customizable operating systems and the spectacular decrease
in the cost of powerful computing hardware, it was only a
matter of time before the Virtual Private Server was
available to everyone.
The creation of User-Mode Linux allowed users of the Linux
operating system the ability to run virtual copies of their
servers as user-mode (unprivileged) programs. It was
possible for an average user on a dedicated server to have
a virtual server that was previously only available to
privileged root users. UML was a quantum leap forward, but
those with a VPS under UML found that the system wasn't as
efficient as it could be, and significant processing power
was lost in providing the virtualized servers.
As the VPS rose in popularity, it became obvious that there
was a business opportunity in providing a fast, efficient
virtual server software. The next generation of software
included a commercial package, called Virtuozzo, from
SW-Soft, and a free package, called Xen. Virtuozzo was a
well-polished package, aimed at vendors who wanted to lease
VPSes to the public, but who didn't want to have to create
their own hosting/virtualization infrastructure from
scratch. It was robust and reliable, but not free. Those
with a smaller budget could use Xen as their platform, but
this route required the creation of auxiliary software to
provide support for services that weren't available in the
first generation of Xen.