Kernel is the main system/module of an OS that loads first and then everything else loads. The kernel manages the memory, process and tasks, and disk management. It connects the system hardware to the application software.
Think about the Kernel as the heart of an OS.
https://en.wikipedia.org/wiki/Kernel_(operating_system)
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Well with 8GB of ram and 15 VPS @ 1 GB ram each... The resources (ram in this case) have to be shared among each other. If 8 VPS of those 15 are using 1GB ram at MAX for long periods of times every VPS will suffer during this time attempting to access whatever RAM required for their processes.
Think about it as a highway with only 2 lanes. The more cars merge into the highway those 2 lanes will become more congested with traffic and begin to slow down everyone and it can get to the point where you come to a complete stop.