Vitualisation is running several 'virtual' servers on a single physical system. There virtual servers run just as you would expect them to run, except there are several on a single piece of hardware instead of many pieces of hardware.
Having fewer physical servers can save on storage/rack space and the cost of the hardware itself. It also reduces vendor specific hardware lock-in. This is where a vendor designs software to work only on their hardware, to avoid possibly higher charges a virtual server can emulate the required hardware as opposed to actually purchasing the hardware.
Virtualising your network can increase server resilience as there are fewer hardware failures involved. It can reduce disaster recovery downtime as the backup machines can be transferred to another site quicker than a physical server. In a similar guide to vendor lock in it can protect you from vendors stopping support for applications you may have become reliant on.
Finally, from a security stand point it can be used to isolate applications or services. This means if one virtual server contains one service and another a second service, a malicious attacker may gain access to the first service but not the second as they are not linked.
As you can imagine, this concept has become extremely popular over the last few years.
Our Consultants can discuss whether virtualising your network is the right move for you, show you various options available to you and then implement the desired option.