RAM is an abbreviation for Random Access Memory. This is a sort of computer memory, which, unlike other storage devices such as harddrives or DVDs, enables the information to be accessed directly without reading the previous content located within it. Every time a program is started, it's stored within the RAM, since it may be accessed much faster than if it was read from another media device. In terms of the hosting service itself, more RAM means that more web apps can work concurrently on a certain server, especially if they are resource-demanding and are accessed by a large amount of people at the same time. Not like a shared web hosting package where the resources of a given account could be flexible and quite often depend on what other users consume too, a VPS provides a guaranteed amount of RAM which you can use all the time. That memory is assigned to one hosting server only and shall not be used by other clients even when it's not being used.