OpenVZ (Open Virtuozzo) is an operating system-level virtualization technology based on the Linux kernel and operating system. OpenVZ allows a physical server to run multiple isolated operating system instances, known as containers, Virtual Private Servers (VPSs), or Virtual Environments (VEs). It is similar to FreeBSD jails and Solaris Zones.
OpenVZ is not true virtualization but really containerization like FreeBSD Jails. Technologies like VMWare and Xen are more flexible in that they virtualize the entire machine and can run multiple operating systems. OpenVZ uses a single patched Linux kernel and therefore can run only Linux. However because it doesn’t have the overhead of a true hypervisor, it is very fast and efficient. The disadvantage with this approach is the single kernel. All guests must function with the same kernel version that the host uses.
The advantages, however, are that memory allocation is soft in that memory not used in one virtual environment can be used by others or for disk caching. OpenVZ uses a common file system so each virtual environment is just a directory of files that is isolated using chroot, newer versions of OpenVZ also allow the container to have its own file system. Thus a virtual machine can be cloned by just copying the files in one directory to another and creating a config file for the virtual machine and starting it.