Virtualization creates a virtual (rather than an actual) hardware platform, and is part of a powerful trend in enterprise data centers to allow groups of servers to be shared so that applications don't have to be placed on dedicated servers and instead can be shared over multiple servers that are pooled together. This allows fewer servers to be deployed saving on the number of servers deployed, energy costs from cooling and centralized server administration. VMWare is the leader in this space. Microsoft also has a product in this space called Hyper-V.