An Operating System is the software that interacts with the hardware of a computer and works as the intermediary between apps and the hardware, which includes peripheral devices such as a printer, a computer mouse or a keyboard. When you run software, it sends requests to the OS using an API (Application Program Interface) and the communication is done via a command line or a Graphical User Interface (GUI). Similar to a personal computer, web hosting servers also have an Operating System which acts as a host for all the software installed on them, which includes script apps 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 could install a guest OS on it and have a different system environment in contrast with the physical server host Operating System.