An Operating System is the software that communicates with the hardware of a computer system and functions as the intermediary between all the applications and the hardware, including peripherals such as a printer, a computer mouse or a keyboard. When you run an app, it transfers 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). Identical to a personal computer, web servers also feature an Operating System which functions as a host for all the software installed on them, including script applications or server-side software such as a flash server, a VOIP server, and many others. A virtual machine can be set up on a physical one, so you'll be able to install a guest OS on it and have a different system environment in contrast to the physical server host Operating System.