VAX/VMS was originally virtualization of the PDP-11. Windows NT benefited from the loss of MICA/PRISM to virtualize/isolate what was once messy, unreliable, single-tasking, cooperative Windows 3.1/9x to be more isolated, reliable, concurrent, and parallel processing where the fundamental unit of isolated granular execution was the process like UNIX.
DOS mode "VM"s run within Windows 3.x/9x/NT aren't really isolated VMs because they can't replace the DPMI server or launch another instance of (386enh mode) Windows. All they do is semi-isolate real mode and DPMI client apps somewhat to allow multiple instances of them. They can still do bad things™ and don't have full control of the "system" in the way a real system, emulator, or hardware-assisted type-1 or type-2 hypervisor does. They're "virtual" in the way DesqView was "virtual".
Consumerized enterprise virtualization happened in the PC world with VMware Workstation->GSX->Server->ESX->ESXi/vCenter in relatively quick succession around 2001-2005. Xen popped up about the time of ESX (pre-ESXi).
IBM keeps quietly churning out z-based mainframe processors like the z17. Software from the 60's and 70's still runs because they don't do the incompatibility churn that's slowly being more and more adopted in the past 15 years to break everything, all the time, so that nothing "old" that had a long-lasting standard or compatibility ABI that was working will work now. I'm sure it's a lot of work, but churn is also work and especially when it breaks N users. Also, I don't think many folks from the PC-based enterprise server world appreciate the reliability, availability, and service features mainframes have/had.. although vMotion (moving VMs between physical machine linked to shared storage) when it came out was pretty cool.
A form of virtualization was first demonstrated with IBM's CP-40 research system in 1967, then distributed via open source in CP/CMS in 1967–1972, and re-implemented in IBM's VM family from 1972 to the present. Each CP/CMS user was provided a simulated, stand-alone computer.
Source: https://en.wikipedia.org/wiki/Virtualization
Sometimes it feels like we don't have any actual innovation in CS anymore and it's all from pre 2000s and only made mainstream starting then.