Virtualization provides abstraction between hardware and software. It allows multiple virtual machines to run on a single physical machine, sharing resources. There are two approaches - hosted virtualization runs on a standard OS, while hypervisor architecture installs directly on hardware for better efficiency. VMware offers virtualization software for data centers, desktops, and mobile devices to optimize resource use across hardware, storage, and networks. Standards like OVF and VMDK help define virtual machine packaging and disk formats.