Computer operating systems are software working in tandem with hardware. Virtual machines run that same OS software from something called the Hypervisor, which is in part like a hardware emulator, and virtual computer manager.
While you can create storage locations in virtual machines, those locations are typically accessible to both the virtual machine and the machine that runs the virtual computer.
A benefit to VMs from a personal standpoint is that you can do most anything in the virtual machine without fear of irreparable harm to the host computer: like if you’re examining a file for viruses it can be far safer to engage with the file from within the VM. You can run applications that only run well in Windows 98, for example, by having a W98VM.
From the corporate perspective, VMs can increase productivity and drastically cut hardware costs. Instead of a thousand high-performing desktop computers, you can setup a high-performing server/storage array and setup users with thin or zero-clients, which are purpose built hardware to connect to virtual machines. It doesn’t take a lot of horsepower to engage with a remote server and stream video of what you should be seeing on your desktop, uploading your keyboard/mouse/etc input.
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