The drawback of scaling by physical nodes is that we always have to spec out the gear for a peak load. This means that, during low load times, the server isn't doing a lot of work and we have spare capacity.

If we could run more workloads on this single server, we could achieve more efficient use of the hardware. This is what we mean when we talk about density – the number of workloads that we can cram into a server, virtual machine, or operating system. Here we introduce the hypervisor. A hypervisor is a layer of software that abstracts the server's operating system and applications from the underlying hardware.

By running a hypervisor on the host server, we can share hardware resources between more than one virtual operating system running simultaneously on the host. We call these guest machines or, more commonly, virtual machines (VMs). Each VM can operate independently from the other, allowing multiple tenants to use the same physical host.

The following is a diagram showing how the layers can be visualized. A hypervisor sits between the host operating system and the virtual machines and allows a layer of translation so that the guest operating systems can communicate with the underlying hardware:

Now, our unit of scale is the virtual machine. Virtual machines are configured and deployed in minutes using the hypervisor management software or through the APIs that are provided. The life cycle of a VM is typically weeks or months, though it can sometimes be years.

With virtual machines, we still have to run and maintain entire operating systems. The next evolution of compute utilizes the hardware more efficiently.