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Virtual machines are software-based emulations of physical computers that can run operating systems and applications in isolated environments. They allow multiple operating systems to run on a single physical machine, providing flexibility, scalability, and cost savings for organizations. Virtual machines can be created, managed, and controlled through virtualization software, which enables users to allocate resources, monitor performance, and easily move virtual machines between physical servers. This technology has revolutionized the way IT resources are provisioned and managed, making it easier to deploy and maintain complex software environments.