Virtualization is a process of virtually segregating physical hardware resources into a set of virtual resources that can independently work as a computing resource and provide customized and dedicated CPU, RAM, or storage. Each server and its resources are created in an isolated environment. Each isolated environment is abstracted from the physical OS and underlying hardware configuration. Such resources are called VMs or instances.

Virtualization is achieved by using virtualization software that maintains the abstract and virtual layers on top of physical hardware. Let's understand these virtualization software and virtualization types in the following sections.