An Operating System is the software which interacts with the hardware of a PC and functions as the intermediary between the installed applications and the hardware, including peripheral devices such as a printer, a mouse or a keyboard. When you run software, it sends requests to the OS using an API (Application Program Interface) and the interaction is done via a command line or a Graphical User Interface (GUI). Just like a personal computer, hosting servers also have an Operating System that serves as a host for any software installed on them, which includes script applications or server-side software such as a flash server, a VOIP server, and many others. A virtual machine can be generated on a physical one, so you can install a guest OS on it and have a different system environment in contrast with the physical server host OS.