A VPS is a dedicated virtual space in a physical server. You can use this space as if it were your own server. It provides a high protection level. Usually, access to it is password-protected.
If you use a VPS, you have access to all the functionality of a physical server. You can implement the needed functions and pay for what you use only. Up to some extent, it is a relatively cheap solution. The scalability level is quite high, too.
However, a VPS has some drawbacks. The virtual space is located on a physical server. Many users might use the same physical server. Hence, the server CPU, RAM, bandwidth resources are shared among all the clients. If most users want to use the server simultaneously, your website might have loading problems or even go offline.
We speak about a dedicated solution when a business uses the entire physical server. It might be more expensive than a VPS, however, it pays off fast. A dedicated server offers you significant benefits. You use it exclusively for your needs. Hence, all the CPU, RAM, bandwidth capabilities are for you. You can develop and implement there any functionality even though it might be not available at all if you rent a VPS. If you need to implement a complex solution, like CRM, a dedicated server becomes more cost-efficient than a VPS.