A hypervisor in computing is a scheme which allows multiple operating systems to run, unmodified, on a host computer at the same time. The term is an extension of the earlier term supervisor, which was commonly applied to operating system kernels in that era.
Hypervisors were originally developed in the early 1970s, when cost reduction was forcing multiple scattered departmental computers to be consolidated into a single, larger computer — the mainframe; that would serve multiple departments. By running multiple operating systems simultaneously, the hypervisor brought a measure of robustness and stability to the system; even if one operating system crashed, the others would continue working without interruption. Indeed, this even allowed beta or experimental versions of the operating system to be deployed and debugged without jeopardizing the stable main production system (and without requiring costly second and third systems for developers to work on).
The first computer system designed specifically for virtualization was the System/360|IBM S/360 Model 67 mainframe computer, developed in the late 1960s. It included page translation table hardware for virtual memory and other techniques that allowed a full virtualization of all kernel tasks, including I/O and interrupt handling. Prior to this point, computer hardware had only been virtualized enough to allow multiple user applications to be run. With the advent of the IBM S/360 model 67, the supervisor state was virtualized as well, thus allowing multiple operating systems to run simultaneously. The virtualization features became a standard part of the later System/370|IBM S/370 line and its succesors, including today's zSeries.
These features were most fully exploited in VM/CMS, arguably one of the first and most important open source operating systems. VM stood for Virtual Machine, emphasizing that all, and not just some, of the hardware interfaces had been virtualized. This system enjoyed early and rapid development by universities as well as within IBM; however, it was eventually swallowed by IBM during political infighting, essentially killing off the open-source version in a disputed and bitter battle. All modern-day IBM mainframes in the zSeries line continue to be backwards compatible with the four-decade old IBM/360 line.