RAM, or Random Access Memory, is a core component of computer systems that is used to store currently-running applications and other data not yet committed to the disk. 

It is fair to say that the amount of system RAM directly affects system performance. With more RAM, a VPS has more ability to perform without restrictions and slowdowns. With less RAM, a VPS may encounter a shortage and will be forced to perform more slowly as a result. 

The amount of RAM required for a VPS is different for each application, but you can use the following guide to get an idea: 

128 MB RAM: Very small, ideal for a single daemon or script.
512 MB RAM: The minimum required by Windows Server, and the absolute minimum suggested for many server applications like cPanel.
1 GB RAM: Enough for many applications, and a good amount to run Windows Server or any Linux distribution with good performance.
2 GB RAM: Used for busy applications, large applications and servers that hold many connections or users simultaneously.