Common server operating systems, e.g. Windows and Linux, tend to be difficult to host multiple applications. This results in large numbers of operating system instances. This requires many physical servers when these are hosted on dedicated physical hardware.
Virtualization of server operating systems allows multiple disparate operating system instances to reside on a single physical hardware thereby reducing the number of physical servers and the associated costs.
Secondary benefits of virtualization are that the virtualized operating system workloads can be readily moved among different physical hardware to provide for changes in capacity.