An Operating System is the software which communicates with the hardware of a PC and works as the intermediary between applications and the hardware, which includes peripherals such as a printer, a computer mouse or a keyboard. When you run an app, it transmits requests to the OS through an API (Application Program Interface) and the interaction is done through a command line or a Graphical User Interface (GUI). Identical to a personal computer, web hosting servers also have an Operating System that functions as a host for all the software installed on them, which includes script applications or server-side software such as a flash server, a VOIP server, etcetera. 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 OS.