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Virtual Machine (VM) is a software program or operating system that not only exhibits the behavior of a separate computer, but is also capable of performing tasks such as running applications and programs like a separate computer.

In other words, a VM is a software application that performs most functions of a physical computer, actually behaving as a separate computer system.

A virtual machine, usually known as a guest, is created within another computing environment referred as a “host.” Multiple virtual machines can exist within a single host at one time.

Source: Virtual Machine (VM)