A hypervisor is hardware or software that creates and runs virtual machines (VMs) by separating a system's operating system (OS) and resources from the hardware to allocate them to VMs. They simply allow one physical host to run multiple VMs, saving on the compute resources required, such as CPU, memory, disk, and network. Hypervisors are also known as virtual machine monitors (VMM) and manage the VMs as they run alongside each other.
There are two types of hypervisors.
These are traditional bare-metal hypervisors and are hardware components. They run directly on the underlying host system and don't require any base OS. VMware ESXi, Citrix XenServer, and Microsoft Hyper-V hypervisor are common type-1 hypervisors.
These are software-based. With type-2 hypervisors, a host OS runs on the underlying host system. Basically, software runs on the OS. These are called hosted hypervisors. VMware Workstation Player and Parallels Desktop are type-2 hypervisors.
The servers that host the hypervisors execute the guest operting system, and the hypervisor, in turn, loads the client OS of the VMs. The hypervisor, which is the virtual machine manager (VMM), allocates the required CPU resources, memory, bandwidth, and disk storage space for all its VMs.
Hypervisors manage VMs, making them essential in any virtualized environment. IT admins can simply monitor and manage the hypervisor, and add necessary configurations, after which the hypervisor will apply those configurations to the VMs.
Hypervisors have a wide range of use, including for desktop virtualization, server consolidation, and data replication.