A virtual machine is a virtual representation, or emulation, of a physical computer. They are often referred to as a guest while the physical machine they run on is referred to as the host.

Virtualization makes it possible to create multiple virtual machines, each with their own operating system (OS) and applications, on a single physical machine. A VM cannot interact directly with a physical computer. Instead, it needs a lightweight software layer called a hypervisor to coordinate between it and the underlying physical hardware. The hypervisor allocates physical computing resources—such as processors, memory, and storage—to each VM. It keeps each VM separate from others so they don’t interfere with each other.

While this technology can go by many names, including virtual server, virtual server instance (VSI) and virtual private server (VPS), this article will simply refer to them as virtual machines.

Source: IBM