The one thing that makes the virtual private server (VPS) desirable is its isolated nature. Virtual servers are created by partitioning a physical server logically into multiple sections. Even if you own a number of virtual servers, none interferes with others. Unlike a shared server, a virtual server is not shared with other websites and organizations. And also, a problem in one virtual server does not impact its neighbors. This is precisely the reason the virtual server is often used as a honeypot.
Now, in layman’s terms, a honeypot is a trap that lures malicious programs and then attacks them. Wikipedia defines it in the following words:
(Source)…a honeypot is a trap set to detect, deflect, or in some manner counteract attempts at unauthorized use of information systems. Generally, it consists of a computer, data, or a network site that appears to be part of a network, but is actually isolated, (un)protected, and monitored, and which seems to contain information or a resource of value to attackers.
Now, the reason a honeypot is important for your servers is because it helps check the vulnerability of your system. The ability of the honeypot to counter attacks helps you figure out a security scheme for the rest of your servers.
A honeypot can be a risk to a network if it is not isolated enough. Since a VPS is an isolated server, it makes sense to use it as honeypot. VPS is also used as a testing environment – a sandbox. You can check an earlier post to learn about VPS as a sandbox.