as we know that the cloud is just a group of clusters.
and the cluster is just a group of data centers and every single datacentre is a group of servers, and one single server you can run on it many VMs, but how to run many VMs on one single server. this happens by using virutaization ( by using something called hypervisor = OS "operating system").
so, to make your server able to host many vm's with many os , you should use hypervisor, the hypervisor are two models (VMware and hyper-V")
so the vmware is making you able to install many vm's on one single server, which means you will have many OS running on one single server.
using Vmawre (hypervisor) enabling you to utilize your server (RAM, CPU, physical storage) as much as possible and help for the availablitiy for your app that you want to run on the server by installing this app one different vm's and this can be on the vm's trhat on the same server or diff vm's on different servers (high availability)