|Sorry, I disagree on your opinion about historycal IBM VM/370 and today virtual machines running on PCs.|
On a IBM system 370 you could run DOS/VS or MVS or both concurrently when installed VM/370. It was pure software allowing to execute programs compiled for DOS/VS while operating under MVS environment. Without any hardware device added to the system. I personally managed that when young thirty years ago.
Today on your X86 PC you can run Windows (maybe DOS) or Linux or both concurrently after installing a virtual environment as Virtual PC, VirtualBox or VMWare (whose name remembers the ancestor IBM VM). That without plugging in any additional card or device.
There is one fundamental difference: VM/370 is a Hypervisor while virtual machines are convedntional (but complex) user applications. I.e. a Hypervisor is a software layer under operating system(s) that monitors the slave supervisors (for VM/370 DOS/VS and MVS - and a customized software for airlines management).
Virtual machines lie to the guest OS that thinks to be the master of the computer. Open Source Xen and VMWare Enterprise environments are more similar to Hypervisor. So to be short a Hypervisor is system software while virtual machines run system software but are plain applicatioins.
Then there are Emulators, i.e. something that mimics something else. DOSbox is an emulator, it doesn't run system software, just executes programs compiled under MS DOS. In the jurassic eve of computers IBM had emulators to run 7094 programs on S/360 mainframes.
So to summarize:
Hypervisor --> Operating Systems --> Applications
Operating System --> Virtual Machine --> [guest] Operating System --> Apps
Operating System --> Emulator --> [guest] Application
All above belongs to the realm of software (system or application). To end let me post a personal note: in 1973 I awarded my engineering doctorate by lecturing on "Description and Emulation of Computer Architectures: the SLANG Language".