Virtualization in server management enhances resource utilization, reduces hardware costs, and improves system scalability. By creating virtual instances of physical servers, organizations can run multiple operating systems and applications on a single machine. This leads to increased efficiency, as resources can be allocated dynamically based on demand. Virtualization also simplifies disaster recovery and backup processes because virtual machines can be easily migrated and restored. In essence, it allows for better management of IT infrastructure, resulting in reduced downtime and improved service delivery.