RAM is an abbreviation for Random Access Memory. This is a sort of computer memory, that, unlike other storage devices including harddrives or DVDs, allows the info to be accessed directly without reading the previous content saved within it. Whenever an application is launched, it is stored inside the RAM, as it can be accessed much more quickly than if it was read from another media. With regard to the hosting service itself, additional RAM means that more web applications can operate all at once on a certain hosting server, especially if they are resource-demanding and are accessed by a large number of people all at once. Not like a shared web hosting solution in which the resources of a certain account may be flexible and often depend on what other end users consume also, a VPS includes a guaranteed amount of RAM that can be used at all times. That memory is allocated to one web server only and will not be used by other customers even if it's not being used.