An Operating System is the software that interacts with the hardware of a computer and serves as the intermediary between apps and the hardware, including peripherals such as a printer, a mouse or a keyboard. When you run software, it sends requests to the OS through an API (Application Program Interface) and the interaction is done via a command line or a Graphical User Interface (GUI). Identical to a personal computer, hosting servers also have an Operating System that functions as a host for the software installed on them, which includes script applications 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 could install a guest OS on it and have a different system environment compared to the physical server host OS.