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A virtual machine is a software-based emulation of a physical computer that runs on a host machine. It allows users to run multiple operating systems on a single physical machine, enabling them to isolate applications and workloads from each other. Virtual machines are commonly used in server virtualization, where multiple virtual servers can run on a single physical server, maximizing resource utilization and efficiency. They are also used for testing, development, and software compatibility purposes. Some popular virtual machine software includes VMware, VirtualBox, and Hyper-V.