Virtualization, in computing, refers to the act of creating a virtual (rather than actual) version of something, including but not limited to a virtual computer hardware platform, operating system (OS), storage device, or computer network resources.

Virtualization began in 1960s mainframe computers as a method of logically dividing the mainframes’ resources for different applications. Since then, the meaning of the term has broadened.[1] 

… it continued and now this concept and technology is widely used to set up system architecture within data centers. Virtualized (data) servers populate physical servers. A well known company that is specialized around these questions is VMware.