What is a Hypervisor?

A Hypervisor is a piece of software or hardware that can create and run virtual machines. In the case of VMware, this is VMware ESXi. A machine on which a hypervisor is running one or more virtual machines is known as a Host Machine. Any virtual machines running on top of the Host Machine is known as a Guest Machine.

There are two types of Hypervisors, Type 1 and Type 2, as you can tell they were getting super creative with the names.

Type 1 

Type 1 Hypervisors are designed to run directly on the system hardware, a prime example of this would be VMware ESXi. These Type 1 hypervisors are also known as bare-metal hypervisors.

Type 2

Type 2 Hypervisors are a little different in that they require a host operating system in order to run. The host operating system then provides memory management, disk, CPU, network support etc. A couple well known examples of a Type 2 Hypervisor would be VMware Fusion (my Hypervisor of choice for OS X), Parallels, and VirtualBox.