RAM is an abbreviation for Random Access Memory. This is a sort of computer memory, that, different from other storage devices including harddrives or DVDs, allows the info to be accessed directly without reading the previous content located in it. Anytime an application is started, it is stored within the RAM, since it can be accessed much faster than if it was read from another media. In terms of the web hosting service itself, more RAM means that more web applications can work at the same time on a given hosting server, particularly if they're resource-demanding and are accessed by a large number of people all at once. Not like a shared web hosting solution where the system resources of a particular account may be flexible and quite often depend on what other users consume as well, a VPS includes a guaranteed amount of RAM you can use at all times. That memory is allocated to one web server only and won't be used by other customers even when it's not in use.