Virtualisation is the process of Installing multiple operating systems on one or more pieces of Hardware. The benefit include reduced Capital Costs, reduced Electricity Costs and ease of operating Systems Management.
An example of this would be to install the following operating Systems on a Server with Hot Swappable Raid 5 (Robust Hard Drive Configuration) and Dual Power Supply (One can Fail – the other kicks in Automatically). These Operating Systems could be a Microsoft Server 2012, CCTV, a Modern Telephone System and or an Application Server etc..
The fact that they are Virtualised allows them to be portable to another Virtualised server or the resources provided to them can be finely tuned to maximise the capabilities of the hardware (Host Server) that the individual Virtual Servers sit on.