An Operating System is the software which interacts with the hardware of a PC and works as the intermediary between the installed applications and the hardware, including peripheral devices such as a printer, a computer mouse or a keyboard. When you run an application, it transmits requests to the OS using an API (Application Program Interface) and the communication is done through a command line or a Graphical User Interface (GUI). A lot like a personal computer, web hosting servers also feature an Operating System which functions as a host for all of the software installed on them, including script applications or server-side software such as a flash server, a VOIP server, and many others. A virtual machine can be set up on a physical one, so you could install a guest OS on it and have a different system environment in contrast to the physical server host OS.