The concept of virtualization is generally believed to have its origins in the mainframe days in the late 1960s and early 1970s, when IBM invested a lot of time and effort in developing robust time-sharing solutions. Time-sharing refers to the shared usage of computer resources among a large group of users, aiming to increase the efficiency of both the users and the expensive computer resources they share. This model represented a major breakthrough in computer technology: the cost of providing computing capability dropped considerably and it became possible for organizations, and even individuals, to use a computer without actually owning one. Similar reasons are driving virtualization for industry standard computing today: the capacity in a single server is so large that it is almost impossible for most workloads to effectively use it. The best way to improve resource utilization, and at the same time simplify data center management, is through virtualization.

Data centers today use virtualization techniques to make abstraction of the physical hardware, create large aggregated pools of logical resources consisting of CPUs, memory, disks, file storage, applications, networking, and offer those resources to users or customers in the form of agile, scalable, consolidated virtual machines. Even though the technology and use cases have evolved, the core meaning of virtualization remains the same: to enable a computing environment to run multiple independent systems at the same time.