An Operating System is the software which interacts with the hardware of a computer and functions as the intermediary between apps and the hardware, including peripheral devices such as a printer, a computer 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). A lot like a personal computer, hosting servers also feature an Operating System which functions as a host for all 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 will be able to install a guest OS on it and have a different system environment compared to the physical server host OS.