Virtualization is a simulated, or virtual, computing environment as opposed to a physical one. Virtualization includes computer-generated versions of hardware, operating systems, storage devices and more. This allows a business to slice up a single physical computer or server into several virtual computers or servers (virtual machines). Each virtual machine can then interact independently and run different operating systems or applications while sharing the resources of the single host machine. So basically you turn one physical server into many virtual machines that function as if they were normal.