An Operating System is the software that communicates with the hardware of a computer and works as the intermediary between the installed applications and the hardware, which includes peripherals such as a printer, a mouse or a keyboard. When you run an app, it transfers requests to the OS through an API (Application Program Interface) and the interaction is done through a command line or a Graphical User Interface (GUI). Similar to a personal computer, hosting servers also have an Operating System that acts as a host for the software installed on them, including script applications or server-side software such as a flash server, a VOIP server, etc. A virtual machine can be generated 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 OS.