In their 1974 article, Formal Requirements for Virtualizable Third Generation Architectures, Gerald J. Popek and Robert P. Goldberg classified two types of hypervisor:^[3]

Type-1, native or bare-metal hypervisors

These hypervisors run directly on the host’s hardware to control the hardware and to manage guest operating systems. For this reason, they are sometimes called bare metal hypervisors. The first hypervisors, which IBM developed in the 1960s, were native hypervisors.^[4] These included the test software SIMMON and the CP/CMS operating system (the predecessor of IBM’s z/VM). Modern equivalents include Xen, Oracle VM Server for SPARC, Oracle VM Server for x86, Microsoft Hyper-V and VMware ESX/ESXi.

Type-2 or hosted hypervisors

These hypervisors run on a conventional operating system (OS) just as other computer programs do. A guest operating system runs as a process on the host. Type-2 hypervisors abstract guest operating systems from the host operating system. VMware Workstation, VMware Player, VirtualBox, Parallels Desktop for Mac and QEMU are examples of type-2 hypervisors.

However, the distinction between these two types is not necessarily clear. Linux’s Kernel-based Virtual Machine (KVM) and FreeBSD‘s bhyve are kernel modules^[5] that effectively convert the host operating system to a type-1 hypervisor.^[6] At the same time, since Linux distributions and FreeBSD are still general-purpose operating systems, with other applications competing for VM resources, KVM and bhyve can also be categorized as type-2 hypervisors.^[7]

Source: Hypervisor – Wikipedia