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 peripheral devices such as a printer, a computer mouse or a keyboard. When you run software, it sends 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). Just like a personal computer, hosting servers also use an Operating System which serves as a host for the software installed on them, which includes script apps or server-side software such as a flash server, a VOIP server, and many others. A virtual machine can be created on a physical one, so you'll be able to install a guest OS on it and have a different system environment compared to the physical server host Operating System.