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Virtual machines are software emulations of physical computers that allow users to run multiple operating systems on a single physical machine. They are commonly used in the cloud computing industry to provide flexibility and scalability for businesses. Virtual machines can be easily created, duplicated, and managed, making them a cost-effective solution for organizations looking to optimize their computing resources. They also provide a secure environment for testing new software or running legacy applications. Overall, virtual machines offer a way to maximize the efficiency of hardware resources and improve overall system performance.