Random Access Memory. The fastest and preferred workspace for the server. Enough ram will make the server work faster. To little ram will make your website appear slow. In a normal shared hosting account you share the ram with all accounts on the server, so you don't have any guaranteed ram for your web applications.

However, with a dedicated server you have a specified amount of RAM available. In the case of a VPS (virtual private server) you normally have a guaranteed amount of RAM and the be able to use more if it is available (depending on the other VPS's on the server). In these cases, consider carefully the amount of RAM you need. Too little RAM and your website will appear slower than a turtle.