An Operating System is the software which interacts with the hardware of a computer and serves as the intermediary between all the applications and the hardware, including peripheral devices such as a printer, a computer mouse or a keyboard. When you run software, it transfers requests to the OS using an API (Application Program Interface) and the communication is done via a command line or a Graphical User Interface (GUI). Identical to a personal computer, web hosting servers also have an Operating System that acts as a host for all the software installed on them, including script apps or server-side software such as a flash server, a VOIP server, etcetera. A virtual machine can be set up on a physical one, so you can install a guest OS on it and have a different system environment compared to the physical server host Operating System.