What is the software component that allows multiple VMs to share physical hardware resources?

The hypervisor is the correct answer because it is the software layer that enables multiple virtual machines (VMs) to operate on a single physical hardware system. Essentially, the hypervisor manages the allocation and distribution of the physical resources, such as CPU, memory, and storage, to each virtual machine. This allows each VM to function as if it has its dedicated resources while they all share the underlying physical hardware.

There are two types of hypervisors: type 1 (bare-metal), which runs directly on the hardware, and type 2 (hosted), which runs on top of an operating system. Regardless of the type, their primary role is to facilitate virtualization and resource management across the VMs.

The other options, while related, do not represent the core component responsible for sharing physical resources. A virtual machine is an instance created by the hypervisor, an operating system is software that runs on top of a VM or a physical machine, and a cloud service refers to platforms that can utilize hypervisors among other technologies to provide resources over the internet, but they do not directly serve as the component that shares hardware resources among VMs.