A virtual machine (VM) is a software emulation of a physical server with an operating system.
From an application's point of view, the VM provides the look
and feel of a real physical server, including all its components, such as CPU, memory, and network
interface cards (NICs).
The virtualization software that creates VMs and performs the hardware abstraction that allows
multiple VMs to run concurrently is known as a hypervisor.
There are two types of hypervisors: type 1 and type 2 hypervisor.
In type 1 hypervisor (or native hypervisor), the hypervisor is installed directly on the physical
server. Then instances of an operating system (OS) are installed on the hypervisor. Type 1
hypervisor has direct access to the hardware resources. Therefore they are more efficient than
hosted architectures. Some examples of type 1 hypervisor are VMware vSphere/ESXi, Oracle VM
Server, KVM and Microsoft Hyper-V.
In contrast to type 1 hypervisor, a type 2 hypervisor (or hosted hypervisor) runs on top of an
operating system and not the physical hardware directly. answer 'Each virtual machine requires a
unique IP and MAC addresses to be able to reach to other nodes' big advantage of Type 2
hypervisors is that management console software is not required. Examples of type 2 hypervisor
are VMware Workstation (which can run on Windows, Mac and Linux) or Microsoft Virtual PC (only
runs on Windows).