Server virtualization is a virtualization technique that involves partitioning a physical server into a number of small, virtual servers with the help of virtualization software. In server virtualization, each virtual server runs multiple operating system instances at the same time. Typical enterprise data centers contain a huge number of servers. Many of these servers sit idle as the workload is distributed to only some of the servers on the network.

This results in a waste of expensive hardware resources, power, maintenance and cooling requirements. Server virtualization attempts to increase resource utilization by partitioning physical servers into several multiple virtual servers, each running its own operating system and applications. Server virtualization makes each virtual server look and act like a physical server, multiplying the capacity of every single physical machine.

The concept of server virtualization is widely applied in IT infrastructure as a way of minimizing costs by increasing the utilization of existing resources. Virtualizing servers is often a good solution for small- to medium-scale applications. This technology is widely used for providing cost-effective web hosting services.