What is a hypervisor?

A hypervisor is fundamentally a piece of software designed to create and manage virtual machines (VMs) by allocating physical resources from a host machine. This software operates on the physical hardware and allows multiple operating systems to run concurrently on a single physical machine. The hypervisor abstracts the underlying hardware and provides each virtual machine with its own virtualized hardware environment, which includes CPU time, memory, disk space, and network bandwidth.

In this context, the hypervisor's role is crucial in virtualization technology. It enables efficient utilization of physical resources, as several VMs can share those resources without interference. This capability is particularly valuable in cloud computing environments, where resource efficiency, scalability, and flexibility are essential.

The other options refer to different concepts that do not accurately describe what a hypervisor does. It is not involved in the creation or management of physical servers, nor is it a hardware component. Additionally, it does not pertain to encryption in cloud storage but rather focuses on virtual machine management and resource allocation.