Application virtualization is a technology that allows software applications to run in a virtual environment, separate from the underlying operating system. This means that applications can be executed without being installed directly on the user's device, which helps to reduce compatibility issues and simplifies software management. By using virtualization, organizations can deploy applications more efficiently, as they can be accessed from various devices without needing to modify the host system. This approach enhances security, as applications are isolated from the operating system, minimizing the risk of malware affecting the entire system.