Virtualization is essentially the creation of a near version of something (cpu, hardware, operating system, network resources, etc) which enables the use of multiple virtual versions using the same hardware.
With this setup, one can utilize the features of one single computer, server, etc. and have multiple operating systems running on it.
This type of software uses the hardware resources of a CPU and it’s components to create a fully functional machine that runs it’s own operating system. It will then run applications just like an actual computer, but using it’s own operating system software platform. Basically, each virtual unit contains it’s own unique system (on same box) thus eliminating potential conflict.
The benefit of using a virtualization environment is that several operating systems can be run in parallel on a single unit. This is also very useful in Research & Development departments and in training facilities such as schools and learning centers and BUDR solutions for recovery of critical machines while repair work is being performed.
VMWare is one of the industry leading software solutions for this type of environment, here is a link to answer many questions on utilizing this tool