VMWare is a brand of programs that create virtual computers.
Virtual computers are computers that are created and reside inside other computers. The virtual machine is a computer that runs like it is a separate machine from the perspective of people using it, but it is actually just a logical machine that exists as a group of files inside another computer. Servers and workstations (like your laptop or desk top computer) can exist as virtual machines inside other machines.
One of the reasons fro virtual machines is that as the size and capability of computers has grown we do not need a lot of different physical servers sitting in a server room but can move them on one server but still allow them to work independently as before. This saves on machine costs and environment costs such as cooling and power.
My students use virtual machines to learn the ins and outs of various operating systems while just using the laptop or desktop they already had. If they goof while doing their activities it only hurts the virtual machine and does not affect their real machine.
I have used virtual computers to test new operating systems and not had to have a separate machine.
VMWare does a strong virtual server program called VSphere which I learned how to install and configure last week in Dallas Texas. They also make a workstation product that some of my students use to create virtual desktops.