Describe the concept of virtualization in IT.

Virtualization in IT refers to the technique of creating virtual versions of physical components, primarily servers, storage devices, or network resources. The correct answer highlights the ability of virtualization to enable multiple virtual machines to operate on a single physical machine. This is a critical aspect of virtualization, as it allows a single physical server to host several virtual servers, each functioning as an independent machine with its own operating system and applications.

By leveraging virtualization, organizations can maximize their hardware resources, improve scalability, and streamline management processes. For instance, instead of maintaining multiple physical servers, an organization can deploy several virtual machines on one server, reducing hardware costs and energy consumption while also simplifying disaster recovery and backup strategies.

The other options address aspects of IT and networking but do not accurately capture the central role of virtualization. For example, isolating applications can enhance performance under certain contexts but does not define virtualization directly. The option about running multiple physical machines on a single network relates more to network architecture than virtualization itself. Lastly, while managing cloud resources is relevant for IT, it encompasses broader functionalities beyond the specific concept of virtualization, which is primarily focused on creating and managing virtual instances from physical resources.