This approach is described as full virtualization of the hardware, and can be implemented using a type 1 or type 2 hypervisor: a type 1 hypervisor runs directly on the hardware, and a type 2 hypervisor runs on another operating system, such as Linux or Windows. Each virtual machine can run any operating system supported by the underlying hardware. Users can thus run two or more different "guest" operating systems simultaneously, in separate "private" virtual computers.
The pioneer system using this concept was IBM's CP-40, the first (1967) version of IBM's CP/CMS (1967–1972) and the precursor to IBM's LPAR VM family (1972–present). With the VM architecture, most users run a relatively simple interactive computing single-user operating system, CMS, as a "guest" on top of the VM control program (VM-CP). This approach kept the CMS design simple, as if it were running alone; the control program quietly provides multitasking and resource management services "behind the scenes". In addition to CMS communication and other system tasks are performed by multitasking VMs (RSCS, GCS, TCP/IP, UNIX), and users can run any of the other IBM operating systems, such as MVS, even a new CP itself or now z/OS. Even the simple CMS could be run in a threaded environment (LISTSERV, TRICKLE). z/VM is the current version of VM, and is used to support hundreds or thousands of virtual machines on a given mainframe. Some installations use Linux on z Systems to run Web servers, where Linux runs as the operating system within many virtual machines.
Full virtualization is particularly helpful in operating system development, when experimental new code can be run at the same time as older, more stable, versions, each in a separate virtual machine. The process can even be recursive: IBM debugged new versions of its virtual machine operating system, VM, in a virtual machine running under an older version of VM, and even used this technique to simulate new hardware.
The standard x86 processor architecture as used in the modern PCs does not actually meet the Popek and Goldberg virtualization requirements. Notably, there is no execution mode where all sensitive machine instructions always trap, which would allow per-instruction virtualization.
Despite these limitations, several software packages have managed to provide virtualization on the x86 architecture, even though dynamic recompilation of privileged code, as first implemented by VMware, incurs some performance overhead as compared to a VM running on a natively virtualizable architecture such as the IBM System/370 or Motorola MC68020. By now, several other software packages such as Virtual PC, VirtualBox, Parallels Workstation and Virtual Iron manage to implement virtualization on x86 hardware.
Intel and AMD have introduced features to their x86 processors to enable virtualization in hardware.
As well as virtualization of the resources of a single machine, multiple independent nodes in a cluster can be combined and accessed as a single virtual NUMA machine.