What’s the difference between web hosting and a VPS/dedicated server?

From the perspective of the end user, the main difference between web hosting and a VPS/dedicated server is the fact that a web hosting service is designed and optimised solely for the purpose of serving websites within a leased hosting package and comes with certain limitations regarding options such as installing your own applications, whereas a VPS server, as well as a dedicated server, is configurable and can be used for a variety of things, such as installing your own business solutions (CRM and ERP systems, cash register systems, etc.).