A virtual machine monitor is a program which controls the behavior of multiple virtual machines on a system, allowing each user to have a fully-functioning system. Moreover, each user on a virtual machine monitored network will think of their computer as an autonomous entity, completely separate from the rest of the computing environment. However, the computer hosting all of the virtual machines — and the virtual machine monitor program — is really in control. Through this illusion of autocracy, a single computer with powerful hardware can allow multiple weaker-hardware "drone" systems to utilize its resources in a fairly non-transparent manner. The downside of this is that all computers running the virtual machines are reliant on the host computer; if anything happens to the host, all virtual machines will immediately crash.
Virtual computing enables end-users to run a "system within their system," providing the ability to utilize separate operating systems and iterations of a computer concurrently. A virtual computer user could have their primary computer running Windows Vista and a virtual computer running Windows XP at the same time. On a network, other network users can access these virtual computers for their own use. This is where a virtual machine monitor comes into play.
While each virtual machine on the network operates ostensibly on its own, each machine is really using the same hardware, which is located in the host machine. The virtual machine monitor is the "traffic signal" that keeps everything on the system running smoothly. It tells each virtual computer when it can have access to the video card, memory, hard drive, processor, and other hardware components in the system, preventing crashes and other anomalies from occurring.
The advantage to this is that it allows weaker computers to "borrow" the processing power of stronger computers. By hosting virtual machines on the stronger computer and allowing the weaker computers to access them as though they actually owned the more powerful hardware, the overall performance of those weaker machines is buttressed. All of the idle CPU cycles on the stronger machine can be dedicated to running virtual computers, maximizing the efficiency of that powerful hardware.
This is a tenuous solution, however, as it is tied to the health of the computer network. If the network fails, every virtual machine being used by computers other than the host-PC will become inactive, as it will no longer be connected to the virtual machine monitor. Over-reliance on this solution can therefore result in large periods of downtime if the network is subject to reliability concerns.