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Virtual machines (VMs) are not a full, physical computer. Instead, special software (referred to as a hypervisor) is run on a physical computer that allows the physical computer to be sliced up to run multiple, virtual computers. The physical computers running hypervisor software are referred to as Virtual Hosts. To the operating system running on the virtual computer, it looks like a normal computer. However, the resources of the physical computer are being shared among all of the virtual computers running on it. Some examples of hypervisors are VMware ESX, KVM (Linux's Kernel Virtual Machine), Xen, and VirtualBox. VCL supports VMware ESX both through vCenter and in a standalone, free license mode and KVM. Previous versions of VCL also supported VirtualBox.

In addition to making better use of a physical computer's resources by sharing them among multiple VMs, VMs often provide additional flexibility not available with physical computers. VMs can be quickly and easily cloned to create identical copies of the VM. VMs can also be migrated from one virtual host to another to allow maintenance to be done on the virtual host.